Cye Retail Tech Ltd

PROBLEM
-Most MSMEs in Bangladesh do not use technology for their business, due to a lack of relevance, simplicity and affordability.
-Due to a lack of proper footprint of their financial transactions these MSMEs are unable to access formal finance, forcing them to borrow from the informal market which is costly
-Most MSMEs in Bangladesh primarily operate with a strong dependency on intermediaries for access to market, making business transactions costly.

SOLUTION
- A Tech-Infrastructure easily accessible through a smartphone which is relevant, simple and free of cost. 
- A Tech-Infrastructure which allows the users to digitise their record-keeping creating an organised footprint, enabling them to access, request and review financial products.
- A Tech-Infrastructure which creates a network of buyers and sellers, enabling them to interact directly reducing transaction costs significantly

MSMEs in South Asia and Africa face similar problems thereby implementing the solution enables digital inclusion and transform businesses and the economy. 

Close to 80% of the 8.5 million MSMEs operating in Bangladesh don't keep records of their financial transactions, sales, inventory, etc. They don't use technology for their business, due to a lack of relevance, simplicity and affordability. However, 40% of the base have ownership of smartphones but they use it primarily for their social networking and entertainment.   

Furthermore, these MSMEs are generally blind to inventory, often over stocking and under stocking both which cause serious losses to the business. Compounding to this problem is that their supply chain is heavily dependent on intermediaries which causes the supply chain to be inefficient and costly.

Due to a lack of proper footprint of their financial transactions, it becomes an unsurmountable task to properly track cash flows. This brings the financial viability of the business into question as it is very difficult to garner a clear picture of costs and hence profitability. This explains why 70% of these MSMEs are not able to access finance through formal channels often having to rely on the informal financial sector for loans which is quite costly.

The above-mentioned factors are the primary contributors to the problem our solution addresses through Tech.  

A Tech-Infrastructure easily accessible through a smartphone which creates a network of buyers and sellers, enabling them to interact directly creating a digital transaction log. This allows the users to automatically organise their information, enabling them to access and request for financial products. Furthermore it also creates a unique digital identity for the business which enables them to synchronize personal and business information in one place automatically. 

The solution is an android based application which enables the user to access the technology infrastructure from their smartphone.

The solution allows the users to directly connect to their buyers and sellers. It further facilitates them to track their transactions automatically which generates system based analytics for more informed decision making. As a result users can easily utilise this organised digital footprint to access formal finance. 

This solution is built around security and scalability. At the same time it caters to the users' convenience even if the device operates in an offline environment. Architecturally this solution operates under hybrid cloud focusing on scalability, efficiency and enhancement. Features of the solution is built considering quick adoption of cutting-edge technology like machine-learning, big data, 2FA, biometrics, and IoT.

Our target users include the close to 8.5 million MSMEs operating in Bangladesh. 

A typical MSME owner is male, 38 years old and living on less than $2.5 a day. He is married and has been in the business for nine years. He has most likely completed a primary level education and can read in Bangla. 98% have ownership of mobile phones. Despite 30% of base having ownership of smart phones, they rarely use it business operations primarily using the device for social media and entertainment. Despite close to 43% of them possessing bank accounts, few are able to borrow from banks and have to look to the informal sector for financing. Their buying and selling is mostly done through multiple intermediaries cutting at a significant portion of their profit margin making them unable to rise out of poverty. 

We've conducted multiple studies on the base to understand their needs and pain points prior to developing the product. Furthermore one of the co-founders and the CEO has an extensive understanding of the base resulting from an 18+ year career in telecom and FinTech where he primarily dealt with them. Also before the product was officially launched we ran a one month long MVP testing with a smaller user base.   

Our product evolves based on their feedback making it quite essential for us to be constantly engaged with the base. We have a field force of 70+ individuals stationed in geographical proximity to the users. They are tasked to periodically pay physical visits to users to troubleshoot, help the users better adopt the usage of the technology and to collect user feedback. 

The solution connects them to platform involving other stakeholders such as their suppliers, buyers and financial institutions. This gives them a much more enhanced status in the supply chain by reducing their dependency on intermediaries for market access.  Furthermore by enabling them to digitise their transactions it gives the ability to track the performance of the businesses giving them the edge they need to make more informed decision. It makes it easier for formal financial institutions to finance them as well. 

By enabling offline MSMEs to step into digital ecosystem and enhancing their access to markets, commerce and credit by increasing their participation and involvement in the digital economy, the problems we are solving is quite well-aligned with the Challenge's broader objective. Furthermore our target market is primarily low-income, are not able to access the digital economy and are based in rural areas, quite aligned with the population the Challenge wishes to address. 

As far as our selected dimension is concerned we are equipping the MSMEs with Tech Based financial tools which will help them to thrive and sustain. 

The product is being piloted in 16 districts of Bangladesh primarily in the northern and southern part of the country where connectivity is still an issue. Currently 10,000+ MSME owners are using the product for their business operations. From that we concur that the product is useable and the business model feasible. 

We're still calling it a pilot because there is a steady stream of feedback from the users and the product is continually evolving. New functions are being added on a periodic basis. Our target base of 8.5 million MSMEs have business with a myriad of different natures. Primarily we've segmented it into 15 different segments. The product is constantly under development to cater to the different needs of these segments. 

The greatest innovation that the solution brings forth is that it bypasses the multi-layer hierarchy in regards to market access created by intermediaries and transforms the value chain into a more peer to peer model.  

For hundreds of years, in this part of the world business had been riding the network of the intermediaries to reach out to either their buyers or sellers. And this practice has consolidated the position of the intermediary so firmly that they started to dictate the business as per their own terms. As a result of that businesses had always been looking for alternatives. But it was never possible due to the nature and the influence of the intermediaries. Technology has opened up the avenue to explore the alternatives, the hunt for which had been long lost.

It will change the way the market operates creating much scope for efficiency and optimisation. By allowing buyers and sellers to connect without intermediaries it will bring down costs on both ends making businesses more profitable and sustainable. With the addition of enhanced access to finance that our solution provides, MSMEs will be able to grow exponentially. This will create more oppurtunity amongst a myriad of other benefits to the economy as a whole.   

Current Users: 10,000+

In One Year: 40,000

In Five Years: 1,200,000 directly 10,000,000 indirectly

A major risk of the project is that the users would not make regular use of the app as they do not have sufficient capacity in using technology services. This can be mitigated by incentivizing the users for regular usage and in person monitoring by field operatives. The users might be reluctant to use data services for which we can partner up with Telcos' to give them cheaper data bundles. There is low penetration of smartphones amongst women which we can mitigate by distributing smartphones.

We'll use the following indicators to measure our progress: 

-No. of MSMEs registered

-Capacity development of the registered base

-Active Usage of the users

-Transactions complemented using our platform

-Loans disbursed to MSMEs through our platform

Founders: 4

Tech Team: 8

Market Operations: 6

Support Function: 7 (4 full timers, 3 part timers)

Intern: 2

Sales and Distribution Partner: 13

Field Force: 85

Founders come with a diverse set of skills cumulatively having 60 years of experience in Telecom, FinTech, Banking and Pharmaceuticals, working primarily around the MSMEs making them quite familiar with their pain points and aspirations.

The product development and strategy team has relevant experience working for Social Businesses in technology adoption primarily working with those at the bottom of the pyramid, particularly in agri-tech and health-tech.

The market operations team has more than 20 years of experience working with retailer/resellers of FMCG products, Telecom, Pharmaceuticals and FinTech. 

While working for bKash, the CEO faced a serious amount of challenge convincing the MSMEs to go cashless. Trying to find out why, he discovered that this segment generally don't have enough capital to finance their businesses and are unable to access formal final hence being forced to turn to informal finance which is entirely cash based and untracked. This experience allowed him to conceive the idea of building a Tech infrastructure which they can easily access and connect to the ecosystem players digitally. That idea would eventually evolve into the current solution. 

The primary consideration of the sales and distribution partners is that they either they are MSMEs or are associated with MSMEs welfare and development (Market Samity). They interact on a weekly basis with the core solution development team sharing the inputs, ideas and agendas of the MSMEs who they interact with everyday.  

Gender equity is a top priority for the company. We are going to engaged in a UNCDF project with an NBFI focusing on access to supply chain and finance where 60% of the 2100 MSMEs we will serve are women entrepreneurs. To achieve this goal we are planning to ensure that 30% of the deployed field force are female. To support this core objective we're also maintaining a 20% female representation in the solution team involved in design and decision making. 

Furthermore, we plan to select sales to distribution partners from indigenous, ethnic communities to reach out to those bases, particularly located in the North West and South East part of the country.  

-Access to investment capital

-Access to grants

-Technology & Product Development knowledge sharing

-Mentoring

-Potential collaboration with other Solvers

-Exposure

-Advisory assistance

Business Model: Experts from MIT can help us refine our business model and find the right product-market fit. 

Monitoring & Evaluation: Experts from MIT can help us measure the impact that our solution is having on the market.

Technology:

Massive amounts of data will be collected through our platform. We need help from the experts at MIT to assist us in analysing that data and finding a good use for it. 

As market need and technology evolves so will our product. We need technological support from the experts at MIT to implement the most cutting edge technology so as to stay afloat in the market. 

Potential solvers working in the same field. They could be social businesses, not for profits or for profits trying to solve community issues focusing on MSMEs. 

Relevant MIT faculty or initiative working with machine learning, AI and big data. 

We believe ourselves to be qualified for the prize as we are working with digital inclusion that will drive economic growth for the offline MSMEs. The DNA and philosophy of the company is to create infinite possibilities through digital inclusion. 

If we do win the prize, 50% of the will be utilised for driving inclusion in terms of acquisition and capacity development. 30% of the money will be utilised for technology and product development.