Source: Asia Development Bank
Here are three lessons that we have learned in crowdsourcing digital solutions to support MSMEs’ and WMSMEs’ access to financing:
Employ a bottom-up and top-down, collaborative approach. Effective crowdsourcing requires a deep understanding of the problem. Therefore, various stakeholders, including government and non-governmental institutions, (W)MSMEs, financial institutions, and technology service providers, were consulted to learn more about the situation on the ground to better frame and flesh out the challenges. The collaborative approach used by ADB’s IT Department, gWFX, the Private Sector Financial Institutions Division of ADB’s Private Sector Operations Department, and the Finance Sector Office ensured that the challenges were relevant and actionable. In addition, collaboration generated lessons for broader engagement with various groups.
Design problem statements tailored to match the unique needs of Developing Member Countries (DMCs). The intent behind these challenges is to obtain proposals that are no longer at the ideation stage. Instead, these should be actionable, relevant, and responsive to the specific context in the DMC covered by the challenge. Prioritizing local experience in the evaluation process also helped in shortlisting proposals that were socio-culturally and economically appropriate.
Furthermore, we used local experience as one of the criteria for evaluating submissions to ensure that the shortlisted teams were familiar with the context. Taking these criteria into consideration enabled the team to filter out which of the submitted solutions would best fit the context and needs of the respective DMCs. This was also to ensure that any solution would not leave out the women’s market segment but would instead look at technology through a gender lens and provide tools to help women access the financing they need to thrive.
Ensure the right solution is selected through validation. Beyond identifying and selecting a solution that addresses a specific challenge faced by financial institutions, it is equally crucial to validate the solution through a “test-and-learn” approach. By stress testing the solution during both the proof of concept and pilot stages, teams can assess its viability and scalability, ensuring that it meets the needs of the financial institutions and the entrepreneurs it aims to support.
For example, in Pakistan, the AI-leveraged solution for financial statement analytics underwent testing to ensure that the solution met the financial institution’s objectives of scoring WMSMEs more effectively. The team gathered business and technical requirements of the institution, prioritized features and functionalities, and worked with the IT and Operations teams to create and implement an integration roadmap. Next, the solution will be deployed in a test environment to lend to a sample size of WMSMEs for validation.