UNDP Colombia works for the financial inclusion and protection of shopkeepers

Bogotá, D.C. 11 October 2024. UNDP Colombia, in collaboration with UNDP Insurance and Risk Finance Facility and the UNDP Accelerator Lab, Fasecolda and Banca de las Oportunidades, have announced the winners of an Innovation Challenge held to promote financial inclusion for small businesses in Colombia. The challenge aimed to promote innovative solutions that improve access to financing and insurance for shopkeepers in the country.

Participants in the challenge included 42 diverse organizations, from insurers and reinsurers to banks, fintechs, insurtechs, data providers, payment gateways, academics and cooperatives. The participants worked together in 17 teams to devise innovative solutions that integrate financing and insurance, designed to meet the specific needs of shopkeepers.

First place was awarded to the Colmena Seguros, Entre Amigos and Bemovil team, who developed the “Easy” initiative. This innovative solution offers a revolving credit of up to 5,000,000 Colombian pesos, with daily or weekly payments adapted to the capacity of each participating business, and including embedded insurance to protect against damage and theft. With the support of BeMovil, small businesses are also encouraged to engage in saving and sustainable growth mechanisms.

The Seguros Bolívar, Daviplata and Fenalco team took second place with the “Veci Ágil” ("Agile Neighbours"). This solution seeks to strengthen and promote the sustainability of small businesses through a comprehensive approach. It includes a revolving loan with direct disbursements to suppliers, as well as SME parametric insurance, designed to protect shopkeepers from climate risks such as heavy rain, earthquakes and floods. The solution will be implemented in phases, starting with digital credit for working capital with monthly payments and payment protection insurance. It will later be adjusted to offer weekly or biweekly payment options, along with personalized support for shopkeepers. In more advanced stages, a revolving loan and parametric insurance will be introduced, expanding coverage and strengthening small businesses’ resilience against natural disasters.

The first place team will receive up to US$25,000, while the runner up will receive up to US$15,000, to be used in technical assistance for structuring, designing and implementing the prototype. The two top initiatives will also have the opportunity to participate directly in the UNDP Insurance Innovation Laboratory, coordinated by UNDP’s Insurance and Risk Finance Facility.

The jury that evaluated the proposals was made up of Barbara Magnoni, President of EA Consultants; Maria José Naranjo, Vice President of Corporate Strategy at Bancoldex; Belén Gómez, U-RUS Coordinator, attached to the Executive Presidency of Rios Uruguay Seguros (RUS); Luis Francisco Serrano, Representative of Shopkeepers; Juan David Castaño, Vice President of Business Strengthening of the Bogotá Chamber of Commerce; Diego Herrera, Lead Financial Markets Specialist at the Inter-American Development Bank; and Nicolas Rodriguez, Country Manager of PayRetailers.

Evaluation criteria included the desirability of the solution for shopkeepers, the viability of the financial and insurance model, and the technical feasibility of implementing the project on a large scale. The jury also considered the proposals’ social impact and ability to promote small business formalization and sustainability.

This Innovation Challenge has demonstrated the power of collaboration between various sectors in promoting the creation of innovative insurance solutions. The initiatives aim not only to close the financial gaps that small traders face, but also to strengthen their businesses’ capabilities, sustainability and resilience. In doing so, the project helps to support the ongoing productive capacity of shopkeepers in Colombia, who play a fundamental role in the local economy and in the well-being of the communities they serve.

More about the Innovation Challenge

The challenge was fortunate to receive valuable support from partners who acted as mentors, thematic experts and facilitators throughout the process, contributing their knowledge to the design of comprehensive, effective and sustainable solutions.

The exercise focused on understanding the needs of shopkeepers. To fully understand their challenges, the organizing team carried out visits, focus groups and dialogues with various actors in the ecosystem, and the inputs obtained from these exercises served as the basis for the development of the challenge. During the ideation session, the UNDP Acceleration Lab presented an innovative augmented reality tool that allowed participants to get up close and personal with the day-to-day lives of shopkeepers.

This challenge highlights the joint efforts of the national government, international partners and the financial and insurance sector in working towards the achievement of the Sustainable Development Goals. Building small traders’ economic and social resilience helps these vital players to remain in the market, supporting their growth and ensuring they can continue to contribute to the well-being and development of local communities.