Nagad focusing on new products for the marginalised

After bringing technological innovation in the last three years, Nagad is now focusing on developing micro savings and loan products for the marginalised people, who have limited access to funds and options for small savings, the company’s Managing Director Tanvir A Mishuk told The Business Post’s Talukder Farhad in an interview

Mishuk shares his thoughts on the eve of Nagad’s celebration of its three-year journey. Nagad – a Digital Financial Service of Bangladesh Post Office – is stepping into its fourth year on March 26.

In these three years, the number of registered customers reached six crore and per day transactions hit Tk 750 crore. Technological innovation and affordable services helped Nagad achieve these milestones.

Nagad has completed three years. What new service are you introducing next?

Nagad always works to serve the people’s needs. The marginalised people have very limited options to save their money in banks. For example, when a farmer’s wife needs to save Tk100, she has no option, because no bank would allow her to make that small a deposit.

Such small deposits are not feasible for banks, so we will launch a micro savings option for the marginalised people this year.

Besides, we want to launch daily transactions and loan facilities with a single digit interest rate for micro businesses. We have millions of grocery shops and they depend on cash transactions. The amount is however big. We are converting these transactions to Nagad.

They will have a transaction record, which will help them get a loan facility with single digit interest. Micro businesses are currently depending on loans with higher interest. We want to ease their burden and help their businesses flourish.

What are Nagad’s achievements in the last three years, and how did it help amass such a large number of account holders?

Nagad launched its operations on 26 March, 2019. In the last three years, one of our biggest achievements was to allow customers to open an MFS account without any paper form.

Nagad account holders open their account using e-KYC, which not only saves their money and time, but also cuts our operating cost by Tk 130 per application. A new customer can open their account within a minute, compared to ten days when using paper forms.

Nagad is the first financial transaction company to introduce e-KYC in Bangladesh.

This facility has allowed us to get customers very quickly compared to other operators. The miracle happened because we employed technological innovation. Nagad can now proudly say that the e-KYC facility brought a positive change in the entire industry.

Before this facility, customers had very few accounts and went to the agents to send money. This is called domestic hundi. It has been happening since the last ten years, but no one tries to stop this practice because they get Tk 20 per transaction.

What are the key features attracting customers to Nagad?

We introduced a facility for customers to open accounts using feature phones. We know that only 30 per cent mobile phone users have smartphones. So, we signed agreements with telecom operators to bring Nagad’s services to the remaining users.

As a result, Nagad can also play a role in paying government allowances. During the pandemic, we were able to facilitate nine crore transections of allowance to three crore people within three months.

Nagad can reduce the cash-out and cash-in fees with technological innovation, which got us a large number of customers. We offer zero fees for utility bill payment and cash-in services.

Our calculations show that by introducing these facilities, we have saved more than one thousand crore taka for the customers in the Fiscal Year 2019-20.   

Along with cash-in, cash-out services, the expansion of merchant payments is also increasing. But in this case, why does Nagad seems to be a little behind?

We have consideration for the general public regarding merchant payment services. For example, we offer this service at the Gausia Market because the people need that.

We are not offering these facilities to people visiting five star hotels so that they can get a buy-one-get-one free offer using the merchant payment method.