SYEDA MAHRUFA BASHAR TANISHA BUKHT

MUHTASIM SAROWAT RAYED

CHAIRPERSON LECTURER
IBA CAREER CENTRE INSTITUTE OF BUSINESS ZR-61, BBA 21st BATCH
ADMINISTRATION, DHAKA MA JOR: FINANCE
 2 4 6
1 3 5
 To conduct a comprehensive
industry analysis on Fintechs,
comparing four major sub-
industries, and to assess the
strategic implications of these
analyses for potential new
entrants.
To get an overview
of the fintech To conduct a cross-segment
industry both on a comparison of the major four
global and segments in the industry to
national scale. understand the value chain
dynamics of each sub-
industry.
To develop To find out the
consumer profiles growth rate,
of the various ecosystem stage
buyers of fintech. and key success
factors of each of
To identify problems,
the sub-sector.
opportunities, and the
scope of competitive
advantage from all
these analyses.
 Structured questionnaire
News, industry reports and
Convenience sampling
white papers published by
Sampling frame: Age 20+, living in Dhaka
PwC, Citi, KPMG and others
No. of respondents: 97
Company specfiic resources
Digital Consumer Class and Industry
(including work done for
Professionals
clients)
Limited relevance of Confidential nature
secondary sources of company and
due to lack of local client-specific
information information
LightCastle Partners (LCP) is Working at the nexus of private,
one of the fastest growing public and development sector, we
consulting firms in Bangladesh. specialize in
developing/implementing innovative
We combine data, analytics
social enterprise models to forming
and technology to solve real market entry strategies to building
world problems. world-class technology platforms.
 75+ 120+
local and international clients projects completed

20+
members and growing
250,000+
data respondents

4+
years of presence
Market Consulting
Intelligence and
Technical Support

Business Solution
Analytics Implementation
 Simply defined, Fintech Refers to any collaboration between
finance and tech, where finance is the intended consumer and
technology is the prospective seller.
1950s to 1980s

Credit Cards ATMS

1990s to 2010s

Paypal and Alibaba M-Pesa and bKash

 Insurance and
Asset and Wealth Reinsurance
Fund Transfer Management Products Banking and
and Payment Products Capital Market
Products Products
 GDP
(2015)

195.08 FOREX RESERVE

BILLION USD
(DECEMBER 2016)

32.09
BILLION IUSD

ADB FORECAST,
FY 17

6.9%
GDP GROWTH RATE
 220
MILLIONS

31 34
170 25 28
12 13 15 16 18 19 22
25 26 27 With an annual growth rate of 10.5%,
23 24

120
17 18 19 20 21 22
the MAC population, as defined by
44 48 52 56 60 64 70 75 81
BCG, has middle class purchasing
86 92
70
traits, and have the purchasing
power to buy a broad variety of
84 80
20
77 73 70 66 62 59 55 52 48 goods

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(30)

BOP Aspirant Emerging Middle Middle and Affluent

 Financial Industry

Startups Regulators and

Accelerators

Investors
Vendors

Consumers
bKash Rocket UCash mCash

Payza Payoneer Gpay RobiCash

 Bangladesh' Fintech Hub Readiness
Innovative Mindset Bangladesh’s Fintech Hub Readiness

Rating (1-5)

Innovative Mindset 4
Investor Suppport Regulatory Support
Regulatory Support 3

Technical Ability 2.5

Business Confidence 3

Investor Support 3.5

Business Confidence Technical Ability
FHR Index 3.2
In Bangladesh, where
smartphones are rapidly
becoming the norm (according to
Lightcastle’s forecasts, smartphone
penetration will increase to 75.8%
by 2021), the disruption will more
likely than not be brought on by
new entrants, like bKash did in
2011
 DIGITAL ASPIRANTS
Concentrated in Dhaka, digital aspirants are one
step closer to being truly digital. They purchase
low-cost items online and prefer cash on delivery
as primary payment option

TRADITIONALISTS
EARLY STARTERS Traditionalists are dependent on
Usually sole decision makers of the physical options for product
family who receive information and evaluation and purchase/payment
make purchase decision via online
platforms.

CONNECTED MAESTROS
Having 100% access to laptop and
smartphones, this group also involves chief
wage earners of the family preferring online/
mobile payment for online purchases.

Early Starters and Digital Aspirants represent most of the Digital Consumers while Connected Maestro represents the highest
value generated per customer.
What kind of Phone Do You Use? How many personal computing On average, how many hours in
devices do you own? a day do you spend in front of a
screen?
6%
41.20% 35.10%

22.70% 18.60% 19.60%

19.60% 16.50%
10.30%
94%
9.30%
7.20%

3 Hours 5 Hours 10 Hours 15 Hours 15+

Smart Phones Both 2 3 4 5 5+ Hours

The consumer side of the Internet of Things (IoT) phenomenon is

already in full swing in Dhaka.
 How do you manage What kind of
Do you invest in
your personal assets insurance do you Most respondents have moderate
and wealth? these markets?
have?
17.5
levels of financial literacy and are
3.10
% 15.5 0% decent managers of their own
43.30
0%
3.10 finances.
%
50.50 % 6.20
% 81.4 73.2 %
However, they have low
0% 0%
6.20% investment appetites and do not
Keep personal ledgers and accounts DSE Only tend to save for future
Health Insurance
DSE and CSE consumption, even when it comes
Use personal accountant Health Insurance and
Life Insurance
Global Commodities Markets
to equity investment.
None I do not invest in any markets
I don't worry about my assets and
wealth
 On a scale of 1 to 5, could you tell us which of these
payment solutions you used the most?

3.04 3.04 1.1 1.0 1.0 1.7

bKash has the most usage by far, with DBBL Rocket a

distant second.
 In the coming years, on a scale of 1-5, how How Useful Do You Think Startups are
important do you think these stakeholders are for in Bangladesh?
providing tech-driven, financial solutions?
43.30%
Private Investors 3.68
35.10%
NBFIs 3.77

Bangladesh Bank 3.9

Startups 3.93 18.60%

The Government 4.02

Vendors 4.07
3.10%
Commercial Banks 4.09

3.4 3.5 3.6 3.7 3.8 3.9 4 4.1 4.2 Not Useful Slightly Useful Useful Very Useful

While startups are generally seen as being useful, commercial banks and vendors were seen as
being the most important stakeholders in realizing the potential of fintechs in Bangladesh.
A M-WALLET BASED, P2P LENDING AND FUND TRANSFERS PRODUCT

A MNO led fintech product that will offer services such as fund transfers, bill and utility
payments, and most importantly, P2P lending.

The P2P loans provided will be like microcredit in nature. The minimum volume will be 1000 BDT while the
maximum volume is 50,000 BDT. The minimum duration of the loans will be one day (eg. Overnight loans)
while the maximum duration is one month.
 ENSURING TIMELY LOAN
PROVIDING ROBUST SECURITY PAYMENTS
SIMPLIFYING THE OF SENSITIVE INFORMATION A real time credit rating
CUSTOMER JOURNEY AND TRANSACTIONS system will penalize those
Using a mobile app simplifies Through using proprietary who often make delays in
the user experience, as blockchain and biometrics. In the loan payments
opposed to the typical USSD- future, database of smart NIDs
based payment funnel of can also be leveraged.
current m-wallet solutions
 WHY DEALSTER IS POISED TO TAP THE NEXT DIGITAL EVOLUTION
Dealster’s functionalities and positioning approaches fintech from a lifestyle enhancer perspective for urban
youths and professionals. On the other hand, most existing fintech solutions in Bangladesh focus on
financial inclusion, which fits peri-urban, rural customers with limited access to and affinity for smartphones.
Tasks Year 0 Year 1 Year 2 Year 3 Year 4
Office Set-Up and
Team Building
Platform
Development
Securing Important
Partners
App Beta Launch
Pre-Launch
Promotional Drive

Launch: Userbase
Building Drive 1
Post Launch
Promotional Drive 1
Platform
Maintenance
Userbase Building
Drive 2
 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Sales Revenue 5,000,000 7,250,000 9,875,000 12,937,500 20,156,250

Transaction Revenue 2,500,000 3,750,000 5,625,000 8,437,500 12,656,250

Borrower Collection Revenue 2,500,000 3,500,000 4,250,000 4,500,000 7,500,000

Operating Expenditures 4,296,000 4,725,600 5,198,160 5,717,976 6,289,774

Taxes (@25%) 1,250,000 1,812,500 2,468,750 3,234,375 5,039,063

Operating Cash Flow (546,000) 711,900 2,208,090 3,985,149 8,827,414

Cash Flow from Investment -2,370,000

Net Working Capital (NPL
Provision) -6,300,000 6,300,000
Net Cash Flow -8,670,000 (546,000) 711,900 2,208,090 3,985,149 15,127,414
NPV 2,299,905.41 BDT
IRR 22%
 IRR

22%
NPV (5 YEARS)

2.3 Million
BDT

BREAKEVEN POINT

2 Years
 Failure to Reach
Critical Mass of Users

Competitor
Products

Technical
Difficulties

Regulatory
Roadblock