Karandaaz Innovation

Facilitating the Ecosystem
towards Transformational Change

Innovation Challenge Fund

The Innovation Challenge Fund (ICF) was launched in 2016 with funding from the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO). The goal of ICF is to generate innovative and practicable solutions to solve complex problems in the areas of financial inclusion and entrepreneurship. ICF is especially focused on addressing barriers faced by SMEs, women and youth in accessing appropriate financial services and participating in the economy. During a challenge fund round, calls for proposals are issued against a predefined problem. Winners are selected through a competitive process and provided risk capital or grants, depending on the nature of the theme and specific objectives of a round. Given the scale and scope of Karandaaz’s work, the ICF remains agile and dynamic in its approach to designing challenge rounds and supporting winners. The challenge fund is managed by a lean team that is supported by an advisory committee of experts leading selection and funding decisions.  


Launched: 16th November, 2020
Status: Applications Closed.

Distributors in Pakistan face working capital deficiencies and extended cash conversion cycles, which have been exacerbated further as a result of Covid-19. In addition, manufacturers have been facing high costs due to an inability to convert receivables into cash on time. Distributor Financing can partially bridge the credit gap faced by SMEs through instantaneous financing, relying on Supply Chain relationships. Karandaaz seeks to disrupt the status quo by facilitating innovative and technology driven approaches to providing high quality, low risk financing to small distributors who tend to go underserved by traditional lenders. We are inviting Local institutions, Fintechs, Advisory and Researxh Firms, Data Analytics Firms, and international organizations of a similar nature have been invited in partnership with Local Fincial institutions to participate in this round to develop and test path-breaking financing models for small distributors in Pakistan. Only shortlisted EOI applicants have been invited to submit RFPs. Grant funds will be provided for development, operationalization and testing of the Small Distributor Financing solution.

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Periodically, Innovation Challenge Fund launches theme based rounds and issues a call for proposals.  Eligibility criteria, including who can apply, are set in accordance with the problem that Karandaaz seeks to solve in a particular challenge round. A two-stage process is followed for selecting innovators. Initially, expressions of interest (EOI) are invited. Shortlisted innovators submit full business plans and present before a selection committee. Winners are supported with funding from Karandaaz. Post award, ICF works with innovators to transform their ideas into tested, commercially viable solutions. By demonstrating success in solving entrenched exclusions and challenges of access to finance and entrepreneurship through a commercial approach, ICF aims to stimulate the market and create knowledge spill overs across industry players.

Launched: September 2016
Status: Applications closed.

The first round of Karandaaz Pakistan’s Innovation Challenge Fund focused on improving the current mechanism of foreign remittances from Pakistani workers working in different parts of the world. Two projects are being supported under ICF Round 1 through grants:

Launched: January 2018
Status: Applications closed.

The third round of Innovation Challenge Fund (ICF 3) focused on supporting the development of innovative, cash-flow based credit scoring models for small and medium enterprises. Two projects are currently being supported under ICF Round 3. The first is with Allied Bank Limited and the second is with a consortium of Bank Alfalah Limited and DigiServ.

Read the relevant press releases here and here.



Launched: September 2019
Status: Applications close.

Through the Financial Inclusion of Women Challenge (FIWC) round, Karandaaz invites proposals for gender-smart, women-centric financial products and services that reflect the needs and preferences of female customers in the financial services marketplace. The goal of the challenge is to provide relevant market players an opportunity to pilot or scale interventions that focus on female market segments and their financial inclusion. Three projects are currently being supported under FIWC. Implementing partners include: Oraan and Techlets managed by the Karandaaz DFS team, and NRSP in collaboration with Karandaaz Innovation. The FIWC Round 2020 is closed and the new round would open at the end of 2021.


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Non-profit company registered under Section 42 of the Companies Act, 2017