In low-income urban communities in Bangladesh, access to affordable and quality childcare remains scarce, placing children’s development at risk and limiting women’s participation in the workforce. The lack of safe-care options forces many mothers to leave children in unsafe environments or exit paid work altogether. In response to this critical gap, BRAC piloted a community-led, home-based daycare model to provide structured care within caregivers’ homes, grounded in proximity, trust, and cultural familiarity. This study examines the piloted daycare model’s impact on the emotional and social wellbeing of children, while also exploring its influence on women's ability to engage in paid work. The intervention trained local women as caregivers, equipping them with knowledge in mental health, early childhood development, responsive caregiving, and play-based learning. Ongoing psychosocial support was provided through Paracounsellor-led home visits, and skill refreshers. A mixed-methods evaluation was conducted to assess outcomes. Quantitative tools included the Kessler-10 Psychological Distress Scale for 262 mothers, and the KAP survey for 150 care entrepreneurs. Child development and behavior were assessed for 1,014 children using the ASQ-3 and SDQ. In-depth interviews were held with 15 mothers to assess their mental wellbeing. Findings indicate improvements in children’s emotional regulation, social skills, and attachment. Caregivers reported increased confidence and skills in supporting children’s emotional needs. Mothers noted reduced stress, greater trust in the care setting, and, in some cases, the ability to resume or extend work hours. However, challenges such as caregiver fatigue, space limitations, and resource constraints persisted. This model demonstrates the potential of home-based daycare as a low-cost, scalable solution for urban informal settlements. By investing in community women as caregivers, such programs can promote child development, enhance women’s economic participation, and foster collective wellbeing through localized, relationship-based care. Key Words: Home-based daycare, Child development, collective wellbeing, Emotional support, women empowerment