Women providing childcare in low-income urban areas of Bangladesh often face emotional strain due to family stress, lack of household support, financial insecurity, and mid-life challenges. These burdens, combined with the demands of caregiving, can undermine their mental wellbeing and the quality of care they provide. Recognizing this, BRAC piloted a home-based daycare model in informal settlements in Bangladesh, embedding structured psychosocial support for caregivers. This study explores how regular mental health support influences caregivers’ emotional wellbeing and caregiving capacity. Community women were trained as caregivers and supported by paracounsellors, who are local women from the community trained in basic counselling skills and psychosocial support. Caregivers received sessions on mental health, self-care, early childhood development (ECD), attachment, stress relief, and anger management. Paracounsellors conducted regular home visits, facilitated training & group reflections, and identified signs of distress to enable timely intervention. A quantitative study was conducted with 300 caregivers using the Kessler-10, Rosenberg Self-Esteem Scale, and KAP surveys to assess mental health, self-worth, and caregiving knowledge. Psychosocial support was provided to 187 caregivers, with fidelity tools assessing emotional wellbeing in 54 of them. Caregivers receiving regular psychosocial support reported reduced stress, increased self-esteem, and improved emotional resilience. These outcomes were linked to more responsive and emotionally engaged caregiving, as observed in practice. Paracounsellors played a preventive and supportive role by addressing early signs of burnout and offering trusted, community-based emotional care. Findings affirm that caregiver mental health is central to delivering quality childcare in low-resource, home-based settings. Integrated psychosocial support can strengthen caregiver wellbeing and improve childcare service.  Keywords: Women entrepreneurs, Emotional wellbeing, Home-based childcare, Caregiver resilience, self-care