Chat-Based Financial Tracking for Unlocking Growth Capital

ONOW is tackling the pressing challenge of economic instability and insufficient financial literacy among microbusinesses in areas hit hard by conflict and economic turmoil. Our solution, "Chat-Based Financial Tracking for Unlocking Growth Capital," utilizes AI-driven chat technology to simplify financial management for micro, small, and medium-sized enterprises (MSMEs). This approach enables better financial clarity and access to growth capital by moving away from traditional ledger-based systems to a more accessible, chat-based platform.

Globally, economic adversity and conflicts have left 114 million people displaced and two billion in precarious, informal employment, contributing to the cycle of poverty and economic exclusion. In regions like Myanmar and Thailand, where our work has impacted over 200,000 MSMEs amid political instability and the COVID-19 pandemic, the need for resilient financial management tools is evident. These MSMEs, crucial to local economies, lack the resources to survive economic shocks.

Our AI-enhanced solution offers a user-friendly way for these businesses to track their finances and gain insights that can lead to better financial decisions, increased access to credit, and economic growth. By leveraging generative AI and popular chat platforms, we make financial tracking more manageable and valuable, encouraging a shift from cumbersome ledger entries to immediate, actionable insights. This not only supports individual businesses but also strengthens community-wide economic resilience.

Additionally, by providing capital providers with precise financial data, we aim to lower risk premiums and unlock essential capital for MSMEs that face barriers like high interest rates or the demand for collateral. The IFC estimates that there is an annual credit gap of $5.2 Trillion for MSMEs in developing countries. This gap creates an insurmountable friction to growth for the MSMEs that 90% of emerging market businesses, and severely stifles growth opportunities. Our tool is aimed to address the 1.7 Billion people that remain unbanked, and do not have access to accessible tools to close that gap. Our goal is to improve the immediate value of financial tracking, fostering a stronger habit of financial management that benefits businesses more directly than the uncertain prospect of future loans.

In essence, ONOW's innovative approach, grounded in the practical use of GenAI and digital communication, addresses the vast challenges of economic instability, financial literacy, and access to capital. By simplifying and incentivizing financial management for MSMEs in developing countries, we are paving the way toward a more inclusive and stable economic future, contributing significantly to global peace and prosperity efforts.

Our solution is a chat-based financial tracking system, powered by cutting-edge AI, designed to help micro-businesses in developing countries manage their finances with ease. It’s like having a financial advisor in your pocket, accessible anytime through popular chat platforms like WhatsApp.

Here’s how it works:

Chat-Based Interface: Users interact with the system through a familiar chat interface. They can enter daily financial transactions simply by messaging, just as they would chat with a friend. This method removes the intimidation factor often associated with financial management tools.

AI-Guided Conversations: An AI system guides the conversation, asking questions in a personalized manner. It’s designed to understand the reasons behind changes in a business's cash balance. For instance, if a user reports an expense, the AI might ask what it was for, helping attribute the change accurately.

Data Structuring AI: Another layer of AI takes these conversations and organizes the information into structured data through AI-embeddings and NLP algorithms. It creates structure and useful data from what is an otherwise messy sea of conversational, back-and-forth data. 

Personalized Insights: The structured data is then used to generate personalized insights for users. These can be presented as structured graphs, or text-based and actionable steps specifically tuned to improving financial habits. Users can receive additional tips and advice, and ask clarifying questions directly in the chat, helping them make informed decisions to grow their businesses.

This solution is designed to be intuitive, removing barriers to financial literacy and management for micro-businesses. It leverages the ubiquity of chat platforms and the power of AI to make financial tracking and improvement accessible and engaging. For a demonstration of our prototype solution, please visit the link here for more details. 

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Our solution is designed for micro, small, and medium-sized enterprises (MSMEs) in developing countries, a demographic that is pivotal to local economies but often lacks access to financial management tools and services. These business owners are at the heart of our mission—they are the engines of community development and economic growth, yet they face significant barriers to financial literacy, inclusion, and access to capital. The IFC estimates that there is an annual credit gap $5.3 trillion for MSMEs in these developing countries, representing a key opportunity to unlocking new growth.  

Currently, many MSMEs operate in an informal economy without structured financial tracking or access to banking services. This lack of formal financial management not only hinders their growth but also their ability to secure loans and investment, critical components for scaling their operations. Traditional financial literacy programs and tools are often out of reach due to cost, complexity, or language barriers, leaving these entrepreneurs underserved and at a disadvantage. They simply were not designed for these users, and they continue to fail to close the gap.

Our chat-based financial tracking and AI-guided advice system directly addresses these challenges. By offering a simple, intuitive platform accessible through widely-used chat applications, we make financial management and literacy accessible to everyone, regardless of their technical skills or educational background. And by providing basic services without the need to download an app, we can ensure that the service remains on our users phones that are constantly churning applications due to limited space. 

Our solution:

Simplifying Financial Management: Breaks down complex financial concepts into manageable, conversational interactions.

Provides Tailored Advice: Offers personalized insights and recommendations, helping users make informed decisions to improve their business health.

Enhances Financial Inclusion: Enables users to create an informal, but digital record of their financial transactions, which can be a stepping stone to accessing formal financial services - either formalized banking or even small amounts of credit to continue their growth. 

By empowering MSMEs with the tools to manage their finances effectively, we're not just improving their individual businesses—we're contributing to the broader economic development and stability of their communities. Our solution offers a pathway to greater financial resilience, growth, and ultimately, prosperity for the underserved entrepreneurs in developing regions.

Our team's unique composition and deep-rooted connection to Southeast Asia, positions us exceptionally well to deliver this innovative financial tracking solution to MSMEs in developing countries. With over 30 dedicated individuals from the region and an engineering team composed entirely of Myanmar nationals, our collective experience and understanding of the local challenges are unparalleled. This personal and professional background provides us with an intimate perspective on the hurdles faced by small businesses in some of the world's most volatile and challenging environments.

Our two lead AI System Developers, coming from small towns in Western Myanmar, embody the resilience and entrepreneurial spirit that our solution seeks to support. Their firsthand experience with the adversities local businesses endure informs our solution's development at every stage, ensuring it is deeply aligned with the needs and realities of our target users. This direct connection to the communities we aim to serve is further strengthened by our senior leadership's extensive experience in Southeast Asia, including living and working in the US, Myanmar, and Thailand. Their decades of immersion in the region, and backgrounds in economic development and stochastic systems have created a unique intersection to address a problem of this difficulty and complexity. 

Additionally, ONOW has always prioritized equitable gender lens in our development work, and our development and staff have prioritized this through design choices like our chat-based methodologies that have always demonstrated equal or higher utilization from women and minority groups we target. 

The design and implementation of our solution are not just about leveraging advanced technology; they are deeply informed by the communities' input, ideas, and aspirations. Our team's background and proximity to these communities ensures a feedback loop that is both authentic and immediate, allowing us to iteratively refine our solution based on real-world use and feedback. This approach ensures that our solution is not only technologically innovative but also culturally sensitive, accessible, and genuinely impactful for the entrepreneurs and businesses we aim to empower.

At ONOW, we have used digital solutions to serve over 200,000 MSMEs in the SE Asian region. However, our AI-driven technologies are still in the early stages. We have a working prototype that is developed and demonstrated in the videos above. However, this has only been tested with about 50 business owners to date, and it is in the very early stages of development. Additionally, we have seen incredible support and excitement when we demonstrate this tool to other Enterprise Support Organizations (ESOs) across the world, and are working on early-adoption rollouts of that now. 

Finally, we see the financial tracker as the key component of a broader system that targets not only MSMEs' access to capital, but also improves the operations and efficiencies of the enterprise support organizations (ESOs) that are striving to support these small businesses through coaching, mentorship, and grants. Our dream is to integrate this application into a broader suite of products that serve MSMEs, ESOs, and capital providers in different ways - fostering a valuable platform and ecosystem that begins to chip away at the opacity of these difficult markets, and unlocks growth and opportunities for more businesses. 

We're applying to Solve to leverage its ecosystem for enhancing our go-to-market strategies, broadening our exposure, and gaining invaluable technical and strategic insights. Our team has developed a powerful AI solution for MSMEs in developing countries, yet we encounter significant challenges in global visibility due to our early stage development. Solve's network of ESOs, industry leaders, and access to tailored technical support and accelerator programs presents a great opportunity to overcome these barriers.

Solve’s ability to facilitate connections and provide access to a suite of in-kind resources, legal services, and additional funding could drastically accelerate our progress. These resources are crucial for adapting our solution to diverse markets and ensuring scalability. Beyond funding, we value the potential for mentorship, leadership coaching, and the collaborative opportunities within Solve's community of impact-driven innovators. Engaging with this network will not only refine our solution but also embed it more deeply within the ecosystems we aim to support, making our technology more accessible and impactful. Joining Solve represents a strategic step towards achieving our mission and enhancing our contribution to economic stability and growth in underserved communities.

Our solution stands out through its innovative approach of combining chat-based interfaces with advanced generative AI (GenAI) to democratize financial management for micro, small, and medium-sized enterprises (MSMEs) in developing countries within familiar chat-based delivery systems like Messenger and WhatsApp. This dual-technology integration significantly improves upon traditional financial literacy and tracking methods by offering an accessible, conversational platform that is both intuitive and personalized.

Unlike conventional tools that may require specific technical skills, ledger-based experience, or are not localized for diverse populations, our solution leverages widely-used chat interfaces to reach our target audience. This familiarity lowers the barrier to entry and encourages consistent use. The GenAI component personalizes interactions, guiding users through financial data input and analysis in a manner that feels natural and engaging. The innovations in LLMs allow this interaction to be scalable and personalized to the nearly infinite uniqueness of different business types. This method fosters a deeper understanding of financial management and empowers users to make informed decisions for their businesses.

By structuring unstructured data through AI, we provide actionable insights directly to users. This real-time feedback loop can significantly improve financial habits and business outcomes. Our solution not only benefits individual businesses but also has the potential to transform the financial services market for MSMEs. Financial institutions can leverage the rich data generated for better credit risk assessment, creating more opportunities for business financing and unlocking new growth opportunities.

Additionally, our plans for the year are to incorporate this MSME portal into a broader suite of products that target MSMEs and ESOs together - providing AI-powered solutions to both sides of an existing market, and empowering them both to have data-driven solutions without the need for experienced data professionals to run them. 

Ultimately, our solution has the potential to redefine the landscape of financial management for developing economies, making it more inclusive, efficient, and supportive of sustainable business growth. It stands as an example of creativity and innovation, showcasing the power of technology to address critical development challenges.

Our solution, leveraging a chat-based interface and generative AI for financial management, is anchored on a straightforward theory of change that maps our innovative activities to tangible outputs and sustainable outcomes for micro, small, and medium-sized enterprises (MSMEs) in developing countries.

Activities: We develop and deploy a chat-based financial tracking tool integrated with generative AI. This tool is designed to be accessible via widely-used messaging platforms like Messenger, Line, Telegram, and WhatsApp, requiring no additional technical skills or financial literacy from the users. The AI guides users through inputting and analyzing financial data, providing personalized advice and insights.

Immediate Outputs:

Increased Accessibility to Financial Management Tools: By using a familiar chat interface, we remove barriers to entry for financial tracking and management - especially for our target audience of unbanked small businesses. 

Enhanced Financial Literacy and Decision-Making: The AI-driven guidance and feedback empower users with knowledge and confidence to make informed business decisions. This creates a positive feedback loop that improves usage and adoption, and further improves advice. 

Short to Medium-term Outcomes:

Improved Financial Habits: Users regularly track and analyze their financial data, leading to better financial planning and management.

Increased Access to Financial Services: The digital footprint created by the tool serves as a basis for MSMEs to access loans and other financial products.

Long-term Outcomes:

Economic Growth and Stability: With improved financial management, MSMEs grow, contribute to the local economy, and become more resilient to economic shocks. They have more confidence in making investment decisions - especially those around potentially risky growth opportunities. 

Market Transformation: The success and widespread adoption of our tool encourage the financial sector to develop more inclusive and accessible services for MSMEs. The data generated can assist in unlocking more capital for business loans through reduced risk premiums and lower interest rates and/or higher capital amounts for non-collateral-based business types. 

Evidence to Support:

Digital financial inclusion significantly impacts MSME growth and stability. The World Bank reports that 1.7 billion adults remain unbanked, yet, the introduction of digital financial services could increase the GDP of emerging economies by $3.7 trillion by 2025. Research by the International Finance Corporation (IFC) finds that MSMEs engaged with digital financial management tools see up to a 40% higher revenue growth compared to those that do not. Furthermore, a McKinsey Global Survey indicates businesses adopting AI technologies report a 20% increase in financial performance. The Global Partnership for Financial Inclusion emphasizes that technology-driven financial inclusion is crucial, potentially adding 95 million jobs in emerging economies. These statistics underscore the transformative potential of integrating AI-driven, chat-based financial management tools in enhancing accessibility, improving financial literacy and habits, and catalyzing economic growth and market transformation for MSMEs.

Our initial test users have demonstrated a high degree of usability, and multiple ESOs across multiple continents have contacted us to implement early-adopter prototypes with their MSME clients. We see this as a clear signal that this solution is on the right track for our target audience.

Our impact goals focus on empowering MSMEs in developing countries to achieve financial stability and growth, contributing to economic development and job creation. Our objectives are designed to align with several UN Sustainable Development Goals, including Goal 8 (Decent Work and Economic Growth) and Goal 9 (Industry, Innovation, and Infrastructure). Here’s how we’re tracking progress towards these goals:

Enhanced Financial Management for MSMEs: We aim to improve the financial literacy and management capabilities of MSMEs. This is measured by tracking user engagement with our chat-based tool, including the frequency of financial data entries and interactions with the AI for advice. It will also utilize tools like NLP and embeddings to assess the quality of entries and unattributed financial amounts. 

Increased Access to Financial Services: Another goal is to facilitate MSMEs’ access to loans and other financial products. Indicators for this goal include the count of users who successfully access capital through our platform, the interest rate they receive, and the changes in the rates of loan repayment among our users, indicating improved creditworthiness.

Economic Growth and Job Creation: We monitor the direct impact of our solution on the economic prosperity of MSMEs and their communities. Key indicators include changes in revenue, profitability, and expenses of businesses using our tool; the number of jobs created and salaries paid by these enterprises; and the overall economic growth within the sectors we serve.

Data-Driven Program Improvements: As the user count grows, we can slice information by industry types and financial categories, enabling us to refine and improve ESO-based programming to reflect actual user needs and outcomes. This adaptive approach ensures our solution remains effective and relevant.

Our solution harnesses a suite of advanced technologies to provide an innovative, chat-based financial management tool for MSMEs in developing countries. At its core, the technology utilizes Large Language Models (LLMs) like GPT for natural language processing, enabling our tool to understand and interact with users in a conversational manner. This AI-driven approach allows for personalized guidance and advice, making financial management accessible and user-friendly.

To manage the diverse and unstructured data generated through these interactions, we employ vector databases. These are crucial for handling non-relational data, allowing us to efficiently store, search, and analyze vast amounts of information to provide real-time insights and actionable advice to users.

The delivery of our solution is through popular chat-based technologies such as WhatsApp, Messenger, and Telegram. This choice ensures wide accessibility and familiarity, leveraging platforms that users are already familiar with and comfortable using.

We enhance automation and personalization through the use of AI agents, which learn from each interaction to improve the quality of support provided. Machine translation technology allows us to break language barriers, offering our tool in multiple languages seamlessly. This ensures that our solution is truly global and can serve communities in their native languages.

Prompt Engineering is another key aspect, refining the way we engage with users to extract and structure the most relevant information. This method optimizes the AI’s responses and insights, tailoring the experience to each user’s specific needs and circumstances.

Together, these technologies form the backbone of our solution, using modern and sophisticated systems to tackle the age-old problem of financial management for small businesses, making a significant impact where it's most needed.

We have 5 full-time staff that are working on the AI-deployment of this specific project: 2 leadership staff, 2 engineers, and 1 customer experience professional. As we scale and develop our solution more fully, we plan to hire additional back- and front-end developers, and infrastructure engineers as part-time, full-time, or contractors as necessary. Additionally, we have access to 25 other full-time staff that are working on MSME-facing problems, and a majority of them are in IT-related roles.

We have been directly working with micro-business support in digital channels for the last eight years. However, this team became dedicated to AI-based development in a full-time capacity for the last 16 months. 

Our team's diversity is our strength, reflecting a broad spectrum of cultural, linguistic, and professional backgrounds, with leadership and engineering teams from Southeast Asia, including Myanmar, and senior leadership in the US and Thailand. This geographic and cultural diversity ensures a wide range of perspectives and insights, driving innovation and empathetic solutions tailored to the communities we serve.

We're committed to minimizing barriers to opportunity and fostering an inclusive environment. Our goals include expanding our recruitment strategies to attract diverse talents, especially from underrepresented groups in tech and leadership positions. We actively work on creating a supportive work culture that values open dialogue, a development and coaching culture, mutual respect, and continuous learning about diversity, equity, and inclusion (DEI). Our team is composed to minority groups from Myanmar, as well as members from the LGBT community.

By taking these actions, we strive to not only embody but also champion DEI principles, making our team a positive example of innovation and inclusivity in the technology and social impact sectors in our region.

Our business model is centered around creating value for both Enterprise Support Organizations (ESOs) and Micro, Small, and Medium Enterprises (MSMEs) through our innovative AI-based solutions. Initially, we're focusing on providing ESOs with tools that enhance their ability to serve MSMEs effectively. Our products include AI-based coaching support and automated data analysis, which help ESOs deliver personalized coaching and more accurate impact measurement for the MSMEs they support. Our hypothesis is that these B2B sales channels with ESOs present an easier path towards revenue growth as we journey towards impacting MSMEs directly. 

By improving the quality and efficiency of services offered by ESOs, we enable them to demonstrate stronger outcomes and, in turn, secure better funding. This creates a virtuous cycle where ESOs are more capable of supporting MSMEs, leading to greater economic growth and stability within communities.

In terms of revenue, we plan to charge a fee for our products, offering them as essential tools for ESOs to enhance their operations and deepen their programming and mentoring impacts. While our immediate customers are ESOs, our ultimate beneficiaries are the MSMEs who gain access to improved support services, financial tracking tools, and potentially greater access to capital as a result of our solutions.

To support our startup phase and reduce our investment stage burn rate, we leverage grants and other funding opportunities. This strategy allows us to continue refining our prototype products and target our solutions effectively to ESOs, thereby indirectly reaching MSMEs.

Our long-term vision includes directly offering our solutions to MSMEs, further expanding our impact and revenue streams. We believe that our focus on personalized coaching, impact measurement, and financial tracking will not only attract ESOs seeking to improve their funding outcomes but also MSMEs looking for improved access to capital and support services. Over time, we also aim to incorporate capital providers directly into the platform in an attempt to reduce the interest rate offered for business owners with a higher supply of providers. If this strategy materializes, we aim to charge referral fees to financial institutions for this service. 

Our plan for financial sustainability blends revenue from selling AI-based solutions to ESOs, direct sales to MSMEs in the future, and strategic use of grants and investments during our growth phase. Initially, we’re generating revenue through service contracts with ESOs, offering them our AI-enhanced coaching and data analysis tools. This approach not only validates our business model but also ensures a steady income stream while expanding our impact on MSMEs.

In the longer term, we plan to directly market our solutions to MSMEs, adopting a scalable subscription model tailored to their needs. This direct revenue stream complements our ESO-focused offerings, broadening our financial base.

To reduce our investment stage burn rate and support product development, we’ve successfully secured grants and investments. Notably, we've received grants from organizations like USAID and UN Women, recognizing the potential of our solution to empower MSMEs in developing regions. Additionally, our initial rounds of seed funding have attracted attention from impact investors interested in sustainable development and innovation.

Our success in securing these funds and initial revenue from ESO contracts demonstrates confidence in our business model and the demand for our solutions. These achievements are crucial indicators of our approach's viability and our team's capability to execute our vision, laying a solid foundation for future financial sustainability and growth.