BRAC Bank will judge whether farmers qualify for loans by looking at the history of their everyday digital transactions. The bank has signed an agreement with the International Food Policy Research Institute (IFPRI) to bring 50,000 farmers and 1,500 agricultural input dealers into this technology-based credit service. The two-year pilot, supported by the Gates Foundation, will run until October 2028, a BRAC Bank press release said.
The problem is an old one: many farmers and small agricultural businesses cannot get formal credit and borrow from informal lenders instead. Under FINNOVISION, the bank's SME innovation lab, digital payments and loans will be offered through BRAC Bank's Astha, Shafollo and Jibika digital platforms and its agent banking network, and the resulting transaction data will be the basis for assessing creditworthiness.
IFPRI will study the project's effectiveness and impact through a randomised evaluation, identifying what helps farmers take up digital services and whether the model can work at scale. The findings will feed into policy and plans for a nationwide rollout.
The agreement was signed by Syed Abdul Momen, additional managing director and head of SME banking at BRAC Bank, and Johan Swinnen, director general of IFPRI. Momen said everyday digital transaction data would make it easier to see farmers' financial activity and assess their eligibility for loans, helping them manage working capital and grow their businesses.
Snigdha Ali, country programme officer at the Gates Foundation, said farmers' daily digital transactions could open a path to formal credit. Dr Mehrab Bakhtiar, IFPRI research fellow and project lead, said many farmers remain outside the formal financial system; the research will find out what difference digital financial services make in their lives, so that a successful pilot can become a national model for agricultural finance.
Also present were IFPRI senior research fellow Dr Kate Ambler and Bangladesh country representative Dr Mugdha Mahjab, and Md Shaheen Iqbal, head of wholesale banking at BRAC Bank.
Photo: Md.Alamgir kobir / Wikimedia Commons (CC BY-SA 4.0)
Source: News Bangla 24
Comments
(0)