2024-04-03 07:37:49
City Bank and Bikash have jointly launched a special unsecured micro loan service called ‘Pay-Letter’ under digital micro loans to make purchases easier for urgent needs. Even if there is no money in the account, the customer can now buy the necessary products and pay the price directly with this special loan of City Bank from the Bkash app. If the amount is paid within seven days, the customer will not have to pay any interest.
Managing Director and CEO of City Bank Masrur Arefin and Chief Executive Officer of Bikash Kamal Qadir inaugurated the service program of this special digital small loan ‘Pay-Letter’ at the head office of City Bank on Monday (April 1). Senior officials of both the institutions were present.
The customer will be given an integrated loan limit of Rs 500 to Rs 30,000, subject to eligibility, with instant access to both pay-letter and digital micro loans.
With an aim to accelerate financial inclusion, this Pay-Letter service has been introduced to increase the ability of the marginalized population to purchase essential and daily necessities. Customers will get the opportunity to use pay-letter service by shopping with Bkash app from more than 6 lakh merchant points across the country.
For this loan, after scanning the merchant’s code with the required product or service or entering the merchant number directly, the customer will enter the amount and select the pay letter. Later on the screen he has to select either interest free repayment in 7 days or repayment in 3/6 months.
Seven-day interest-free payment method If the customer fails to pay in full by the seventh day, the pay letter will be converted into a 3-month micro-loan and interest will be charged at 9 percent per annum.
In the 6 months payment system, the customer has to pay 20 percent downpayment at the beginning and the remaining 80 percent will be divided into equal installments through pay-letter and automatically paid on the specified date of every month. In this case also 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 micro-loans with the help of City Bank and Bikash. Since its launch in 2021, more than 250,000 customers have taken digital micro-loans about 800,000 times, amounting to about 750 crore rupees.
Loan eligibility and loan amount are determined based on customer performance and Citibank’s credit risk management policy. Customer must be registered through e-KYC to avail this service. Customers can update their registration as e-KYC customers through data update from Bkash app.
A borrower can repay the loan before maturity, in which case he has to bear interest only for that few days. There will also be no additional charges for advance settlement. Borrowers will be reminded of loan repayment through notification.
Masrur Arefin, Managing Director and CEO of City Bank said at the event, the best feature of digital microcredit is that it is possible to bring several times more customers under this facility than the number of customers who can be given loans through conventional methods. More importantly, we are able to offer our banking facilities to marginal customers in rural areas where we do not have branches or agent points.
Kamal Kadir, Chief Executive Officer of Bikash said, Bikash has made bank loans available to people who are out of banking service. This joint initiative has been taken keeping in mind the various urgent shopping needs of this population, which will play an effective role in creating a cashless transaction ecosystem. For example, a farmer who comes to buy fertilizer today will not stop his agricultural work for financially necessary raw materials. As a result of this service, he will have raw materials on hand, which will keep his productivity intact. Pay-letter service will further encourage and increase the habit of digital payments to consumers and merchants.