City Bank, bKash introduce Digital Nano Loan
City Bank and Mobile Financial Service, bKash, jointly launched a collateral-free, instant ‘Digital Nano Loan’ for bKash users, after the successful completion of a year-long pilot project, said a press release on Thursday.
Eligible bKash users can now apply for a loan ranging from Tk 500 to Tk 20,000 through bKash app, receive the loan instantly and repay the loan in three equal monthly installments (EMI) through bKash accounts. The loan interest rate will be 9 per cent per annum, following Bangladesh Bank’s guidelines.
Zunaid Ahmed Palak, MP, chief guest state minister for Information and Communication Technology, inaugurated the programme Digital Nano Loan at a hotel in Dhaka today. Abu Farah Md Nasser, deputy governor of Bangladesh Bank and Aziz Al Kaiser, chairman of City Bank were present as the special guests.
Mashrur Arefin, managing director and CEO of City Bank, Kamal Quadir, CEO of bKash, Md Zafrul Hasan, Head of Digital Financial Services of City Bank, Ali Ahmmed, chief commercial officer of bkash and senior officials of both the organisations were also present at the event.
City Bank’s Digital Nano Loan, in partnership with bKash, is a groundbreaking initiative that will enable the customers, especially the unbanked population, to access formal financing 24/7 through mobile wallet at a relatively low interest rate from a scheduled commercial bank.
Users can avail this loan through digital credit assessment and easily avoid hassles of conventional lengthy process of taking loans. This initiative represents a major milestone in promoting the Bangladesh government’s widely acclaimed vision for a ‘Digital Bangladesh’.
Eligible bKash app users, as determined by City Bank based on its credit risk management policy, will be able to avail this Digital Nano Loan. City Bank will not charge the borrowers any loan processing fee till further announcement.
City Bank’s Digital Nano Loan involves daily interest calculation and processing. A borrower can repay a loan earlier than the due date, and on such cases, borrower will bear interest only for the days the loan was outstanding. There is no cost for early settlement of the loan as well. Borrowers will be notified of their loan due date on their mobile devices.
City Bank’s Digital Nano Loan product innovations can be attributed to the strong technology support role played by bKash and its strategic partner, Ant Group, a leading technology company. To avail the Digital Nano Loan, bKash users will need to click on ‘Loan (from bank and financial institution)’ icon on the bKash app and enter the desired loan amount within the limit approved by City Bank, as well as accept the terms and conditions. After entering bKash PIN, the loan amount will be instantly disbursed into user’s bKash account provided the bkash user qualifies for the loan.
State minister Zunaid Ahmed Palak, MP, said, “The opportunity for people outside the formal banking channel to get collateral-free instant digital nano loan from banks talks about the success story of Digital Bangladesh. This innovative initiative of City Bank and bKash with the policy support from the central bank is another step towards implementing the government's vision of going digital in every sector.”
Abu Farah Md Nasser, deputy governor of Bangladesh Bank, said, “City Bank’s Digital Nano Loan through bKash app is a groundbreaking initiative. The support of Bangladesh Bank for launching this new service will continue.”
Aziz Al Kaiser, chairman of City Bank said, “This digital Nano loan will play a big role in making Bangladesh fully digital, as envisioned by our honorable prime minister. Customers need not to have a bank account to take this loan. They will able to take and repay their loan through their bkash account. As no collateral will be required, this will help the business sector grow.”
Kamal Quadir, CEO of bKash, said, “The integration between Bank and MFS has opened up multitude of opportunities where banks can design more creative and inclusive services through digital platform leveraging the large customer base of bKash.”
“This initiative further validates the complementing arrangement that banks and bKash developed over the years through cooperation and confidence on each other. The Digital Nano Loan will broaden the scope of financial inclusion,” he added.