DHAKA, Sept 9, 2026 (BSS) – Speakers at a seminar here today said digital lending can play a significant role in expanding financial inclusion in Bangladesh by making formal credit more accessible, affordable and convenient for underserved segments.

They were speaking at the seminar titled “Digital Loans for Financial Inclusion: Prospects and Challenges for Bangladesh” organised by Bangladesh Institute of Bank Management (BIBM) at its auditorium in Mirpur here.

A research team presented a study on the prospects, challenges and future direction of digital lending in Bangladesh at the seminar, said a press release.

The keynote study said digital lending has the potential to make small-ticket loans commercially viable by reducing transaction costs, overcoming geographical barriers and using digital and alternative data to assess borrowers without conventional credit histories.

The research combined a review of international experience with questionnaire-based evidence from banks and interviews with key stakeholders in the financial sector.

According to the study, Bangladesh has already developed a strong foundation for digital finance through mobile financial services (MFS), agent banking, e-KYC and digital payment systems.

However, the country's digital-loan market remains largely concentrated in nano-loans and bank-led or bank-MFS partnership models.

The study found that operating costs of digital lending can be less than 1-2 percent of those associated with traditional lending, indicating significant potential for operational efficiency.

It also found that digital lending accounts for a substantial share of retail loan disbursements and loan accounts, although its share of total outstanding loan portfolios remains relatively small.

The reported classification or default ratio of digital loans was around 3-4 percent, while rural borrowers accounted for approximately 30-40 percent of observed digital borrowers.

Repeat borrowers represented around 45-60 percent of the borrower base, while female participation varied significantly across institutions, ranging from about 3 percent to 25 percent.

The study observed that digital lending could particularly benefit underserved households, microentrepreneurs, farmers, women and micro, small and medium-sized enterprises (MSMEs).

It, however, cautioned that genuine financial inclusion should not be measured by loan volume or the number of borrowers alone. The quality, affordability, sustainability and responsible use of credit should also be considered.

Dr. Md. Habibur Rahman, Chairman of the BIBM Executive Committee and Deputy Governor of Bangladesh Bank, attended the seminar as the chief guest and highlighted the potential of digital lending to promote financial inclusion by bringing formal financial services to people underserved by conventional banking channels.

He said expansion of digital lending could help reduce barriers to accessing credit, particularly for small borrowers and other groups facing difficulties in obtaining traditional bank loans.

He also stressed the importance of ensuring that digital lending develops responsibly and sustainably so that increased access to finance does not create new risks for borrowers or financial institutions.

The seminar was chaired by Dr. Md. Ezazul Islam, Director General of BIBM.

Speaking at the seminar, Dr. Islam said digital lending could emerge as an important pillar of financial inclusion in Bangladesh if the ecosystem surrounding it is developed responsibly.

He said technology can significantly reduce lending costs, shorten turnaround times and bring formal credit closer to people who have historically remained outside the conventional banking system.

At the same time, he cautioned that the speed and scale that make digital lending attractive could also amplify risks such as credit risk, over-borrowing, data misuse, fraud and consumer harm if adequate institutional safeguards are not established.

“The way forward is not to choose between innovation and regulation, but to make the two reinforce one another,” he said.

Dr. Islam called for proportionate regulation, real-time credit information systems, stronger data infrastructure, sound AI and model governance, transparent pricing, effective consumer protection, robust cyber security and targeted digital-literacy initiatives.

He also emphasised the need to create an enabling environment for responsible experimentation through partnerships and regulatory sandboxes, while ensuring clear accountability among banks, MFS providers, fintech companies and other participants in the digital-lending ecosystem.

BIBM Professor Md. Nehal Ahmed presented the keynote paper.

The research team comprised Dr. Md. Shahid Ullah, Associate Professor, BIBM; Rexona Yesmin, Assistant Professor, BIBM; Md. Emon Arefin, Lecturer, BIBM; and Abrar Shahriar, Head of eLending, Products, Acquisitions & Bancassurance, Retail Banking Division, City Bank PLC.

BIBM Professor and Director (Research, Development & Consultancy) Md. Shihab Uddin Khan delivered the welcome address.

The keynote presentation was followed by discussions from designated discussants, including BIBM Supernumerary Professor Md. Ali Hossain Prodhania; BIBM Senior Faculty (on Deputation) and Bangladesh Bank Executive Director Debdulal Roy; BRAC Bank PLC Additional Managing Director and Chief Risk Officer Ahmed Rashid Joy; and City Bank PLC Deputy Managing Director, Chief Economist and Country Business Manager Md. Ashanur Rahman.

The discussants highlighted opportunities and challenges associated with digital lending, including responsible credit expansion, risk management, data governance, consumer protection and greater collaboration among regulators, banks, MFS providers and fintech companies.

The seminar concluded with an open-floor discussion involving banking professionals, researchers and other participants on building a more inclusive, efficient and responsible digital-lending ecosystem in Bangladesh.