Bangladesh Bank has increased the size of the refinancing fund for digital microcredit facilities from Tk 1.0 billion to Tk 5.0 billion, aiming to meet the urgent needs of lower and fixed-income groups in the country. 

The fund aims to improve financial inclusion and enhance the quality of life for marginalized individuals.

The central bank provides a refinancing facility from the fund at a 1.0% interest rate to banks in the country, enabling them to provide micro and small loans in a digital mode.

Under the digital microcredit program, borrowers can obtain loans ranging from Tk 500 to Tk 50,000 for a maximum tenure of six months.

Mobile Financial Service Provider bkash and City Bank jointly introduced digital loans in December 2021, disbursing Tk 3.0 billion within one and a half years.

City Bank has disbursed Tk 1.0 billion to small and micro-loans through bkash in the past two months, with borrowers successfully repaying Tk 2.03 billion of the Tk 2.75 billion loans on time.

There is an outstanding loan amount of Tk 720 million in the market.

Expanding the refinancing fund will raise the scope of digital microcredit loans in Bangladesh, allowing individuals to access hassle-free loans using their mobile devices.

This initiative aims to support the financial needs of fixed-income groups and promote digital transactions, contributing to the country’s vision of becoming a ‘Smart Bangladesh.’