UK-based fintech AGAM International has partnered with Bangladesh’s SBK Foundation to launch a Sharia-compliant digital microcredit product in the country. The offering aims to provide access to financial resources for unbanked and underserved communities, including factory workers, small business owners, and gig-economy workers.
With over four million garment workers in Bangladesh, more than 58 per cent of whom are women, this new financing product aims to make a significant impact, especially for individuals and small businesses who need financial resources but lack collateral or credit history.
Individuals use Sharia loans to purchase a product or service. The loan repayment goes direct to the merchant rather than into the bank account of the borrower. A Sharia micro loan is a small, fixed service charged based murabaha loan offered under Islamic finance principles.
Shabnam Wazed, AGAM International’s founder and CEO, highlighted the role of AI in transforming Sharia lending to make it faster, more efficient, and fair. AGAM’s credit scoring platform will enable SBK Foundation to make accurate, speedy lending decisions, even for financially underserved individuals who lack a traditional credit history.
“Our provision of a Sharia digital microlending takes us a step further in achieving our mission of promoting financial inclusion in Bangladesh, especially among women and the gig-economy group. We are harnessing AI to transform traditional Sharia lending, making the process faster, efficient and fair,” said Wazed.
SBK Foundation can leverage AGAM’s credit scoring platform to enable financially underserved people to have access to finance, even when they lack a traditional credit history. AGAM’s AI-based behavioural analysis-backed credit scoring provides the SBK Foundation with the confidence to identify prospective borrowers and make accurate, speedy lending decisions, enabling micro-entrepreneurs to create value.
Access to finance
In addition to supporting entrepreneurship, the Sharia finance product will allow workers to access credit to purchase essential groceries and medical support through Apon Tech and Niramoy Health Tech Ltd, among others. Access to finance and essential services is expected to improve the lives and livelihoods of many factory workers and entrepreneurs.
Sonia Bashir Kabir, founder & vice-chairman of SBK Foundation, also commented: “We are thrilled to be partnering with AGAM International, with whom SBK Foundation shares a common vision to empower marginalised communities with technology and affordable access to finance.
“This innovative partnership focuses on supporting factory workers, enabling them to access credit to purchase essential supplies and medication. We look forward to seeing the positive impact of our ongoing collaboration with AGAM International.”
The Development Bank of Wales, UK, backed the founding of AGAM International in 2019. The name ‘AGAM’ means ‘advance’ in Bangla. It has a mission to enhance the lives and livelihoods of individuals as well as entrepreneurs by providing the infrastructure for financial institutions in growth markets to deploy innovative solutions to ensure better and more inclusive service for their customers.