Bangladesh Bank has rebranded its digital small-loan refinancing programme as “e-Loan”, introducing a Tk 100 crore revolving fund to expand access to formal credit for financially excluded and marginalised people.

The scheme will remain in operation until June 30, 2028, according to a circular issued by the central bank.

The newly named e-Loan scheme replaces the existing Digital Small Loan programme and aims to support the government's efforts to promote digital financial services and build a cashless society.

Under the programme, participating banks will receive refinancing facilities from Bangladesh Bank at an annual interest rate of 1 percent. Banks can charge borrowers a maximum interest rate of 9 percent per year, calculated on a declining-balance basis.

For Shariah-based banks, the applicable profit rate must also remain within the 9 percent limit.

Loan Limit and Repayment Conditions

Under the e-Loan scheme, an eligible customer can borrow up to Tk 50,000 at a time, with a maximum repayment period of 12 months.

The entire lending process must be conducted digitally, covering everything from customer registration and loan disbursement to repayment collection.

Banks can use internet banking, mobile banking applications, mobile financial services (MFS) and e-wallets to provide and recover loans.

Who Can Apply for e-Loan?

Bangladesh Bank has prioritised several financially underserved groups under the programme.

These include:

  • People living in remote areas and those without access to conventional banking services.

  • Marginalised women and small women entrepreneurs.

  • Persons with disabilities.

  • Third-gender individuals involved in income-generating activities.

  • Students aged 18 to 25 who maintain bank accounts.

Eligible students can use the loans to cover educational expenses, professional training and income-generating activities.

Requirements for Participating Banks

Banks interested in joining the scheme must first complete a pilot programme and obtain board-approved product guidelines.

They must also sign a participation agreement with Bangladesh Bank. Banks planning to distribute loans through mobile financial services must additionally sign a memorandum of understanding with the relevant service providers.

Participating banks are required to follow Credit Information Bureau (CIB) guidelines, avoid lending to loan defaulters and ensure that third parties are not involved in the lending process.

Bangladesh Bank Sets Strict Monitoring Rules

The central bank has introduced specific repayment and monitoring requirements to ensure proper management of the refinancing facility.

Bangladesh Bank will normally recover refinancing amounts from participating banks every quarter by debiting their current accounts.

However, the responsibility for managing individual borrowers' credit risks will remain with the banks. If a borrower defaults, the participating bank will still be required to repay its refinancing obligations to Bangladesh Bank.

The central bank may cancel refinancing facilities if applications contain false or incomplete information.

If a bank obtains refinancing through fraudulent information or fails to repay because of insufficient funds, it will have to return the entire amount along with additional interest at a rate two percentage points higher than the original rate.

Bangladesh Bank will also retain the authority to conduct on-site and off-site inspections to monitor compliance with the scheme.

Through the e-Loan programme, the central bank aims to bring more underserved people into the formal financial system while expanding access to small-scale digital credit across the country.