BRAC Bank, DEG Impulse launch Bangladesh’s first SME innovation Lab

BRAC Bank will partner with DEG Impulse, Germany, to establish the first-ever SME Innovation Lab in the Bangladesh banking sector.

The bank will establish an innovation lab with the support of DEG Impulse gGmbH, a 100% subsidiary of the German development finance institution DEG, within the framework of the development programme. DEG Impulse promotes the social and ecological transition of the private sector in developing and emerging market countries, supporting development policy goals as defined by the Sustainable Development Goals. DEG Impulse implements the development programme on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), the German government agency responsible for international development policy and cooperation.

The SME incubator is dedicated exclusively to fostering innovation among Cottage, Micro, Small, and Medium Enterprises (CMSMEs). This initiative addresses the critical challenges that CMSMEs face in Bangladesh, with a focus on women-led enterprises and vulnerable business segments. The Lab is designed to develop sustainable solutions that can be adopted and replicated across various areas, including Bridging the Gender Gap in Financing, Inclusion of Cottage and Micro Enterprises, Promoting Smart Agriculture, and Climate-Resilient Financing.

As a first step, BRAC Bank and DEG Impulse have signed an agreement to launch the SME Innovation Lab's initial vertical, focusing on women-led businesses. This initiative aims to close the gender gap in financial accessibility and improve credit delivery, fostering a more inclusive and dynamic business ecosystem.

Commenting on the initiative, Syed Abdul Momen, Additional Managing Director and Head of SME Banking at BRAC Bank said: "As an SME-focused bank, BRAC Bank persistently explores new ways to groom and serve the entrepreneurs at the grassroots level.  With the establishment of the SME Innovation Lab, we can generate new ideas and design new product propositions and customised financing solutions to help SMEs thrive. We thank our German partner DEG Impulse for making SME Innovation Lab a reality in Bangladesh."

Once established, the SME Innovation Lab will serve as a global hub for SME innovation, financial inclusion, and women's empowerment. This initiative reflects the enduring vision of the bank's founder, Sir Fazle Hasan Abed, to create inclusive and transformative development through small and medium-sized enterprise (SME) entrepreneurship.