IPDC Finance Ltd has rolled out a blockchain-based supply chain finance platform, the first of its kind in Bangladesh, with a view to giving out low-cost loans to micro and small entrepreneurs.
A blockchain is a database that is shared across a network of computers. Once a record has been added to the chain it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks, according to Reuters.
Blockchains have been used to underpin cyber-currencies like bitcoin but many other possible uses in areas such as banking and supply chain are emerging.
The IPDC’s digital platform, Orjon, was launched at a programme at the Radisson Blu hotel in Dhaka on Thursday.
Orjon is a supply chain financing solution that provides financial facilities to corporates and micro and small enterprises.
Under the system, small enterprises across the country will get loans easily and at a lower cost as the platform will do away with existing manual process.
The digital credit programme will play a role in reducing operational cost in loan disbursement and monitoring, the non-bank financial institution (NBFI) said.
Mominul Islam, managing director of the IPDC, said the NBFI was working to create opportunities for small enterprises.
“We have come up with Orjon for those involved in supply and distribution to further enhance the country’s digital supply chain platform,” he said.
The platform will provide low-cost credit facilities and support to develop more than 25,000 small enterprises and businesses over the next five years. This will generate around 20 lakh new jobs with greater financial progress than ever before, Islam said.
Speaking at the ceremony, State Minister for Information and Communication Technology Zunaid Ahmed Palak said Orjon was one of the historic landmarks of Digital Bangladesh.
“Digital Bangladesh is the philosophy of a revolution. And the latest initiative will give a boost to this end.”
The country will need digital leaders to go forward and a strong workforce will help implement digital applications in the private sector, Palak said.
DFID Country Representative Judith Herbertson said Bangladesh requires skilled workforce to ensure the existing satisfactory growth trend of the economy.
The latest model initiated by the IPDC will help small entrepreneurs get financing in an easy method, which will add value to the economy, Herbertson said.
Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS), said other banks and NBFIs should come forward to introduce similar platforms.
The IPDC has shown the courage by rolling out the platform for the first time in the country which is not an easy task at all, he said.
The BASIS will extend its cooperation to both banks and NBFIs so that they can innovate technology-based financial products, Kabir said.
Shah Alam, executive director of Bangladesh Bank, also spoke.