Transitioning MSMEs to Digital Credit

Mashrur Arefin
Managing Director & CEO
City Bank PLC 

City Bank remains a leader in digital innovation, from the pioneering Citytouch app to Bangladesh’s first AI-driven, fully automated loan. By using transaction data for instant assessment and mobile-wallet disbursement, we have collapsed a week-long lending process into seconds.

From AI-driven lending to specialised support for women and youth, City Bank is dismantling traditional barriers to ensure that inclusive, data-driven finance reaches every corner of the country. On the occasion of MSME Day 2026, Mashrur Arefin, Managing Director & CEO of City Bank PLC, discusses the bank’s strategic evolution to support a new era of digital-native entrepreneurs.

The Daily Star (TDS): The theme for MSME Day 2026 is “The Future Generation of MSMEs.” How is your bank changing its plans to support this new group of young and modern entrepreneurs?

Mashrur Arefin (MA): City Bank is evolving to support a new generation of digital-native, diverse entrepreneurs. By shifting from collateral-based lending to data-driven, cash-flow assessments, we’ve moved beyond traditional branches to provide proactive, tech-enabled credit. At City Bank, we began preparing for this shift back in 2018, when we transitioned CMSME banking to a decentralised, door-to-door sales acquisition model, allowing credit to reach the entrepreneur rather than requiring them to visit a bank branch. Through initiatives like Digital Nano Loans and City Alo, we provide the instant capital and mentorship modern businesses need to build their first credit history.

TDS: It is often hard for very small (cottage/micro) businesses to get loans. What new methods are you using to provide loans without requiring security (collateral), and are these reaching people who have never had a bank account before?

MA: To dismantle traditional barriers, City Bank has replaced collateral requirements with AI-driven, data-based assessments. Through Bangladesh’s first instant Digital Nano Loans and end-to-end digital SME loans, we provide immediate, small-ticket funding via mobile platforms. By leveraging MFS partnerships and Agent Banking, we have brought hundreds of thousands of first-time borrowers into the formal system, building bankable credit histories for the previously underserved.

TDS: This year focuses heavily on youth and women. What special loan packages or services do you offer to help young entrepreneurs and women grow their businesses?

MA: City Bank prioritises women and youth through specialised financial and non-financial support. Our City Alo platform provides women-led businesses with discounted interest rates, insurance, and university-backed management training. For young entrepreneurs, we offer a credit ladder starting with instant Digital Nano Loans that graduate into larger CMSME facilities and startup financing as their businesses mature.