bKash Loan

Category : Best Innovation – Finance (Innovation in Other Financial Institutions)


Innovation Title : bKash Loan

Organization : bKash Limited


bKash, in collaboration with ANT Financial (Technology partner) and City Bank (Financing partner) has started offering a first-of-its-kind Digital Nano Loan that will enable customers to request and receive loans instantly through
bKash. The eligible customers can avail loans up to BDT 20,000 in just a few seconds using their bKash app without
documentation or physical presence. The customer is provided with the ability to pay the loan over a period of 3
months (using auto-deduction from bKash balance) or any time before then. This initiative has been launched for the first time in Bangladesh with the approval of Bangladesh Bank. The Digital Nano Loan will bring impactful changes to
micro-entrepreneurs, marginalized people, students or absolutely anyone to meet their emergency personal or business needs.

bKash has taken the initiative to bridge the gap between the financial institutions and the customers by:
■ Extending credit facility to the underserved and unbanked population and providing convenience in availing and
repaying loans by offering an easy, simple and intuitive user experience.
■ Offering a loan marketplace for the financial institutions so that customers can choose their best suitable loan offer from multiple types of loan offers.
■ Creating a habit among the people of taking and repaying loans from the formal banking channel and reducing the
impact of borrowing from the informal channel (i.e. loan sharks).

The Idea
The idea is to provide instant digital loan with an easy-to-use experience to the bKash customers after assessing customers’ risk using AI based risk assessment engine. Instead of depending on collateral to minimize the credit risk, bKash envisions to depend on its customers’ transactional data to assess the risk and provide loans. As 57 million+ people use bKash, it can reach more eligible customers with a lending product than any other financial services in the country and offer a convenient, scalable and sustainable financing solution to its customers.

Digitally integrated solution:
■ bKash works as the digital channel for customer onboarding, loan disbursement and loan repayment.
■ City Bank (financial partner) works as the financing entity who provides the loan to the customers.
■ ANT financial (technology partner) provides the advisory and technology support for Credit Risk Assessment to offer
the loan service to bKash’s customers. Credit Risk Management Data driven risk assessment framework has been designed with the latest AI based solution to assess the credit risk of the bKash customers before determining the loan eligibility of the customers.

Value Addition
■ Digital Nano loan fulfills the need of small ticket Nano loans (up to BDT 20,000) with utmost ease in availing the loan.
■ A huge base of bKash customers gets instant access to credit by using the bKash App. bKash customers get access to
formal credit at remote locations where such facilities may not be available.
■ The Digital Nano Loan caters to an untapped need of emergency and instant funding for any personal or business use of bKash customers. The convenience of getting instant loan allows individuals and businesses to fulfill their need immediately.

Result and Impact
Since its commercial launch on December 15, 2021, in 40 days, bKash has disbursed BDT 43.24 million to 11,656 customers (~6% of eligible customer base). The success of the product depends on how many unbanked and underserved people will avail the loans repeatedly, repay the loans in a timely manner, and what impact the loan product will make in fulfilling the need of emergency instant funding.