New Age
Business Desk | Jul 21, 2020
City Bank has launched a collateral-free digital loan under which a limited group of selected BKash users can request and receive loans of up to Tk 10,000 instantly through BKash, said a press release.
This is a pilot initiative under which the selected BKash users can request a loan from City Bank from the BKash App, receive the loan disbursement into their BKash accounts and repay the loan from their BKash accounts.
City Bank has launched this initiative with the Bangladesh Bank’s approval and aims to expand access to finance to unbanked people and contribute towards the journey of financial inclusion.
Upon successful completion of the project, City bank will commercially launch the digital loan for eligible BKash users, subject to approval from the BB.
City Bank’s digital loan in the pilot phase has a three-month term, and loan repayment involves three equal monthly instalments auto deducted from the user’s BKash account on fixed due dates.
The user will also be able to repay the EMI amount earlier than the due date and save money due to lower interest cost associated with early repayment.
Interest on the digital loan is charged on a daily basis, therefore in case of early settlement, users will repay interest based on the number of days for which the loan amount was outstanding.
Ant Financial, an affiliate of the world-leading technology conglomerate Alibaba Group, will be the technology partner undertaking credit assessment on potential borrowers for this project.
City Bank managing director and CEO Mashrur Arefin said, ‘Many people in our country, especially the small traders often need money for emergency purposes.’
The journey of this digital loan starts with the idea of how we can deliver money urgently to the right people with more convenience so that they can use it according to their needs, he added.
BKash CEO Kamal Quadir said that the digital loan project of City Bank will broaden the scope for financial inclusion using BKash’s platform and leveraging their robust customer base.
‘We believe this collateral-free, instant digital loan will bring transformative impact on marginalised people, micro entrepreneurs, and students to meet their emergency personal or business needs,’ he added.
