Digital lending is reshaping access to credit in Bangladesh. Mobile apps and online platforms now provide loans within minutes, removing the need for lengthy paperwork or collateral. In 2024 alone, over three million digital loans were disbursed, totalling more than Tk 12,000 crore, according to industry reports. Small businesses, freelancers, and young professionals are increasingly relying on these services to meet short-term financial needs. The convenience of digital lending has made it especially popular among urban youth. With just a few taps, users can secure loans for emergencies, education, or business expansion. Many platforms offer flexible repayment schedules, lower processing fees compared to traditional banks, and instant fund transfers, making these services highly attractive.
However, the rapid growth of digital lending also brings challenges. High interest rates, hidden charges, and lack of transparency can put borrowers at risk. A survey of users in Dhaka revealed that nearly 40 per cent were unaware of full repayment terms before borrowing, leading to financial stress. Fraudulent platforms and weak regulatory oversight further exacerbate these risks. Rural borrowers face additional barriers, such as low digital literacy and limited internet access, making it difficult for them to use these services safely.
To maximise the benefits of digital lending, the government and financial institutions must enforce strict regulations, strengthen consumer protection, and promote financial literacy. Public awareness campaigns can help borrowers understand terms, avoid over-indebtedness, and make informed decisions. Additionally, integrating credit history and digital record-keeping can reduce fraud and build trust in the system.
Digital lending holds immense potential to increase financial inclusion, particularly for small businesses and underserved populations. If carefully managed, it can complement traditional banking by providing flexible and accessible credit solutions. Bangladesh is at a critical point: with proper safeguards, digital lending can be a key driver of economic growth, empowering individuals and businesses alike.
Tasmia Tahseen Samiha
Student, IBA, Jahangirnagar University
tasmiatahseens@gmail.com
