A nano-loan through MFS can boost economic empowerment

In 1992, Nokia, Finland’s leading business conglomerate, made a historic breakthrough by launching the first GSM mobile phone. Undoubtedly, the practical product was a great innovation that started to revolutionize every aspect of human life and activities as Nokia quickly became a household name everywhere. Market analysts, however, observed that it was the tagline “connecting people” that also helped weave the emotional thread for the innovation of the practical communication tool. No wonder, Nokia has unleashed a blitz of its massive market demand and customer choice.

Today, mobile telecommunication has developed through wide vicissitudes and has become entrenched in the fabric of human society in such a way that the prowess of the slogan “connecting people” has gone far beyond. Mobile phone is not only a communication tool but also a convenient platform to plan our daily life works. While the integration of the Internet with it has made all the dramatic preface to the transition to a new way of life, a growing number of applications and services are now directing our conveniences for financial services, health services, transport reservation, geographical positioning and even weather forecasts. And so on.

Apart from enabling instantaneous end-to-end communication, the greatest advantage of mobile phone technology is its provision of financial services. First, rooted in wireless technology, mobile telecommunications have enabled financial inclusion for the unbanked, especially in poor or developing economies. It has brought people under communication networks to remote and inaccessible areas even in developed or developing countries. With the ability for instant monetary transactions, from anywhere to anywhere and from anyone to anyone, these services have simply contributed to an unprecedented scale of financial inclusion for all. During the stalled life of the Covid-19 pandemic, the value of financial services through the mobile phone could be better realized. It has also immensely propelled the explosive growth of e-commerce.

Over the past two decades, the field of mobile financial services has focused on three major aspects — mobile transfers, mobile payments and mobile banking.

While mobile transfers used to be the dominant business along with cash-in and cash-out services, mobile payments have now become a vertically growing matter of choice and engagement. These payments range from groceries, to paying utility bills such as electricity, gas, water, etc., to travel tickets and even education, training and even medical expenses. treatment in hospitals. Through a simple digital code or QR code, one can have instant payment without hassle and with utmost convenience.

Mobile financial services are believed to have gained a new impetus with the launch of loan facilities in Bangladesh. The journey began with a test run a year ago by City Bank Limited and bKash. Yes, the movement has managed to show the prospect of having another positive impact on the lives of ordinary people, again the unbanked poor in particular. Dubbed “nano loan”, it is primarily a digital micro-loan initiative from bKash, MFS’ main provider. The groundbreaking initiative enables customers, especially the unbanked population, to access formal funding 24/7 through a mobile wallet at a relatively low interest rate from a bank regular business. They can avail this loan through a digital credit score and easily avoid the hassle of the traditional lengthy borrowing process.

However, the biggest advantage of this new venture is that it enables poor and small traders or even individuals, all of whom are bkash customers, to meet their instant need for financial support in the amount of 500 Tk to 1,000 Tk with refund. facilitated by installments. Without having to complete the traditional long process of obtaining a bank loan and without collateral, this is indeed another bold step to enable the unbanked to become part of the country’s financial ecosystem.

This initiative represents a major step in advancing the government’s broader vision of a “digital Bangladesh” in which a cashless society, financial inclusion for all regardless of economic classification, instant transaction capabilities, the elimination of bureaucratic hassles and, above all, the conveniences of all kinds of financial means. exchanges will be guaranteed.

According to banking sources and bKash, the nano loan facility has started with great success. Apart from meeting emergency financial needs, even in the middle of the night or during holidays, this facility seems like a real, trusted and easily accessible friend. What else can bring relief to a poor trader or farmer or anyone to meet their urgent need for a small amount of money at any time? The loan repayment facilities are also well suited so that the borrower does not have to scratch his head.

Indeed, this newly innovative service has brought relief to a large part of our society that has always felt isolated from the mainstream of financial activities. It now gives them the silent opportunity for economic empowerment, an important part of financial inclusion and enriching the socio-economic fabric of our nation. The journey has begun and it is well on its way. While bKash has shown the way, other providers like TAP, Upay, Nagad, M-cash, etc. should follow suit by empowering millions of people to play an active role in advancing the wheel of the country’s economic activities and thus its socio-economic progress. The “nano loan” can be another effective reminder to advance the journey.

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