The financial services market is undergoing a significant shift with embedded finance, altering the dynamics of when, where and how individuals engage with such services. This transformation has opened substantial avenues for both financial and non-financial entities to cater to a broader market. 

Businesses integrating innovative financial solutions into their product offerings note a boost in customer engagement and find it instrumental in acquiring new customers. In a report done by PwC in 2023, the market’s rapid growth is projected to increase 5 times in 10 years — from US$54.3 billion in 2022 to US$248.4 billion by 2032.

While embedded finance has been around for decades in the form of white-labelled car rental insurance or apps with 1-click payment gateways, online embedded banking is gaining traction, with e-commerce merchants providing banking services directly on their websites and eliminating the need to redirect customers to a separate platform.

PriyoShop, in its endeavour to empower Micro, Small and Medium Enterprises (MSMEs), has collaborated with Mastercard Bangladesh and LankaBangla Finance PLC to incorporate embedded finance solutions into its platform. This integration aims to elevate the purchasing capabilities of MSMEs, fostering their empowerment and growth.

Empowering MSMEs in their bid to digitalise

MSMEs are the lifeblood of any economy. In the vibrant landscape of Bangladesh’s economy, where more than five million retailers play a crucial role contributing over 30 per cent to the country’s GDP, empowering MSMEs has become of paramount importance. 

The adoption of a wider base includes making concessions to meet customer needs. Many small businesses face challenges in acquiring sufficient funds to purchase necessary items, hindering their ability to serve clients effectively. Similarly, being able to access data and record each financial purchase can lead smaller retailers to make better predictions and thus improve their overall offerings.

This is a strategic opportunity for financial services and products to integrate into the digital experience of a non-financial service or good. The benefits of doing so include improving user experience, facilitating scalability, diversifying revenue streams, and democratising access to financial products. At the heart of its principles, embedded finance models aim to service customers with a wider network that contributes value simultaneously.

This increasingly data-driven and tech-enabled world has forced traditional businesses to begin the integration process and PriyoShop is leading the charge in creating a responsible digital world for these MSME owners.

Leveraging their strong expertise to unlock the potential of MSMEs

PriyoShop is a Bangladesh-Singapore-based on-demand B2B marketplace that empowers retailers by connecting them directly to suppliers to fix the fragmented supply chain. PriyoShop is a pure tech-driven B2B marketplace connecting retailers directly to suppliers (e.g. product manufacturers or wholesalers). Just recently, PriyoShop announced its successful Pre-Series A US$5 million funding round to impact more customers with embedded finance and expand their territory across Bangladesh.

Their mission is to empower small retailers by providing a digital platform that is backed by a full-stack solution. This way, PriyoShop can help independent business owners grow their livelihoods without having to make any additional investments. 

This strategic collaboration between PriyoShop with Mastercard Bangladesh and LankaBangla Finance PLC, a renowned financial institution in Bangladesh known for its innovative financial solutions, marks an important milestone in the realm of digital commerce and financial services within the country. It signifies a convergence of expertise, resources, and networks aimed at enhancing the accessibility, convenience, and security of online transactions for consumers, while also fostering the growth and development of the digital economy ecosystem in Bangladesh. Recognising that the ability to procure goods is a fundamental aspect of MSME operations, PriyoShop has strategically addressed the finance problem to help them unleash their full potential.

The partnership seeks to improve MSMEs’ purchasing power by providing them with financial assistance through credit cards, enabling them to purchase goods and replenish their inventory without facing capital constraints. LankaBangla is committing to inject the funds and provide tailor-fitted solutions that cater to the unique needs of MSMEs, ensuring flexibility and affordability.

Beyond financial assistance, the partnership aims to empower MSMEs through capacity-building initiatives, providing them with the knowledge and skills needed to navigate the evolving business landscape. While LankaBangla provides financial expertise and resources, PriyoShop continues with its promise of creating a digitalised economy in B2B retailers.

This partnership not only underscores the commitment of these industry leaders to drive forward the digital transformation agenda but also sets a precedent for future collaborations that leverage technology and financial ability to unlock new opportunities and empower businesses and individuals across the nation.

From traditional banking models to ecosystem-based approaches

This partnership would help MSMEs upgrade by creating more synergies within a tight ecosystem. As an e-commerce platform, access to embedded finance would empower MSMEs through simplified access to financial services, streamlined operations, and enhanced growth prospects. 

The financing gap for retailers and MSMEs in Bangladesh is significant. According to various reports, including data from the International Finance Corporation (IFC), the financing gap for MSMEs in Bangladesh is estimated to be around US$3.5 billion. 

MSMEs face difficulties accessing formal credit due to insufficient collateral, lack of financial history, and limited access to banking services. Addressing this gap is critical for empowering these businesses and enhancing their contribution to the economy.

Traditionally, when a bank aims to introduce a novel product, such as a unique investment option or a different type of loan, the process involves months, if not years, of development, construction and launch efforts. However, PriyoShop now enables LankaBangla to seamlessly incorporate the latter’s offerings to a broader market typically overlooked by traditional banking processes.

This strategic partnership holds the potential to revolutionise the MSME sector in Bangladesh. By addressing the finance problem, PriyoShop and LankaBangla aim to unlock the buying capability of MSMEs, fostering their growth and contributing to the overall economic development of the country. The impact is expected to ripple across various sectors, leading to job creation, increased productivity, and a more resilient and dynamic business environment.

In a concerted effort to empower Bangladesh’s MSMEs, PriyoShop’s collaboration with LankaBangla Finance PLC marks a significant milestone. By tackling the finance problem head-on, this partnership is poised to breathe new life into the MSME sector. As these businesses gain access to the necessary financial support, the entire economy stands to benefit from their enhanced buying capability, ultimately propelling Bangladesh towards a more prosperous future.

For more information, visit www.priyoshopretail.com.

—

This article is produced by the e27 team, sponsored by PriyoShop

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

The post PriyoShop launches Bangladesh’s first MSME credit card with LankaBangla and Mastercard appeared first on e27.