‘Pay-Later’ service in bKash app with Digital Nano Loan from City Bank

For the first time ever, City Bank and bKash have jointly launched ‘Pay-Later’ – a special collateral-free digital nano loan service that facilitates payments with interest-free loans through bKash app.

Now customers can buy any product or services and pay directly with this special loan, even if they do not have sufficient balance in their accounts. They do not have to pay any interest if the due amount is paid within seven days.

Mashrur Arefin, managing director and CEO of City Bank and Kamal Quadir, chief executive officer of bKash inaugurated this special digital nano loan service ‘Pay-Later’ at the head office of City Bank, today.
Senior officials of both organisations were also present at the launching ceremony, said a press release.

Subject to eligibility, customers will get a combined limit of Taka 500 to Taka 30,000 loans through which they can avail of both Pay-Later and Digital Nano Loans services instantly.

This Pay-Later service has been launched with the aim of accelerating financial inclusion, increasing the ability of marginalised people to purchase essentials and daily necessities. Customers will get the opportunity to use the Pay-Later service by shopping with the bKash app at more than 600,000 merchant points across the country.

To avail of this loan, eligible customers need to scan the merchant QR code or input the merchant number, input the transaction amount and select Pay-Later option. In the next step, the customer has to select between the following methods – interest free repayment within seven days or repayment in 6 months.

For the 7-day interest-free repayment option, if a customer fails to fully repay within seven days, then that Pay-Later will convert into a 3-month loan with a 9 percent interest per annum.

In the 6-month repayment option, a customer needs to make an upfront payment of 20 percent of the total payment amount and the remaining 80 percent will be divided into equal installments. The installments will be paid automatically on the specified date of every month. In this case, a 9 percent interest per annum will be applicable. In both cases, a processing fee of 0.575 percent including VAT will be added.

Bangladesh has entered the era of digital loan through this joint initiative of bKash and City Bank. Since its inception in 2021, Taka 7.5 billion has been disbursed to more than 250,000 bKash customers with a total loan count of around 800,000.

The customer’s loan eligibility and loan amount are determined through an automatic credit assessment system based on the customer’s transaction in bKash account and City Bank’s credit risk management policy.

As per the central bank’s directive, only the bKash customers who have completed e-KYC through the biometric system and using bKash app, are considered eligible for this loan from City Bank. Customers can complete e-KYC by updating their information through the bKash App.

The interest rate of the ‘nano loan’ is determined on a daily basis with the help of technology. As a result, customers can repay the loan even before the maturity date without any early settlement fees. In that case, they would have to pay the interest for the days the loan is taken for.

Borrowers are also notified through SMS prior to the loan repayment date.

At the programme, Mashrur Arefin, managing director and CEO of the City Bank said, “The best feature of Digital Nano Loan is that we can provide loans to more customers than we used to provide through conventional methods. More importantly, now we can provide our banking facilities to marginal customers in rural areas where we do not have branches or agent points.”

Kamal Quadir, chief executive officer (CEO) of bKash said, “bKash has made bank loan accessible for the unbanked. This joint initiative has been taken to fulfil the emergency needs of this community, which will also help developing an effective ecosystem for cashless transactions.” (BSS)