BRAC Bank's Tally loan 'Druti' for financial inclusion of unbanked small traders in Bangladesh

In Bangladesh, more than 8 million business entities are unable to access formal credit and secure banking services. Excluding 40% of small traders out of the financial system. Due to their lack of banking credit history, most banks see them as high-risk traders and choose not to finance their businesses. This leads to an SME financing gap of USD 2.8 billion. When the small traders need capital, they are forced to seek out loan sharks even at interest rates as high as 30% and eventually fall into a vicious cycle of debt.

BRAC Bank wanted to change this with the Tally Loan - Druti, the world’s first initiative to provide loans based on the Tally Khata (bookkeeping book). The loan requires no prior banking credit history, no mortgages and is approved within 72 hours.

The small traders could finally scale up their businesses with loans at bank rates. The initiative helps overcome the mental barriers of small traders, instils capability to break the vicious cycles of debt, ensures financial inclusion for those who had been left out of the financial system and allows them to contribute to the nation’s economy.

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