Digital microcredit fund increased to Tk500cr

Staff Reporter  :
Bangladesh Bank has increased the fund of the digital micro credit scheme from Tk100 crore to Tk500crore, said a circular of the central bank issued on Sunday.
The aim to expand the credit base is to boost digital banking among the impoverished and marginalized population of the country, the circular said. The scheme was designed for providing easy microcredit facilities to the underprivileged population of the country through digital means, including mobile apps.

From this fund, customers will get loan facilities ranging from Tk500 to Tk50,000 with a maximum of 9 percent interest rate, according to an earlier circular issued on June 2, this year.

The circular said scheduled banks will be able to provide these loans using digital means such as internet banking, mobile apps, mobile financial services (MFS), E-wallet etc.
The tenure of the loan will be a maximum of six months at both the bank and customer levels.
With the aim of building Digital Bangladesh, the refinancing scheme was designed to provide digital micro credits on low interest by ensuring availability of small loans, encouraging banks and reducing their funding costs, the central bank said.

The term of this scheme formed with the central bank’s own funding will be three years.
Banks will not be able to collect any other charges or fees from the customer other than the charges or fees mentioned in the existing ‘Schedule of Charges’ guidelines issued by the Bangladesh Bank, the circular said, adding that the lending banks will bear all the responsibility for the recovery of the loan disbursed at the customer level.
All scheduled banks offering digital microcredit will be considered eligible for availing the refinancing scheme. However, banks interested in the scheme must sign a participation agreement with the Financial Inclusion Department (FID) of the Bangladesh Bank, as per the circular published by central bank.