Online-Offline Collaboration on Microloans

This study examines the factors that influence interest and uptake of microloans in the MSME segment, and improve our understanding of the role that such financial products can play in their credit portfolio.


Microfinance brought about a revolution in the financial service industry by allowing low-income households to access formal credit in small ticket sizes. As the microfinance model has matured, however, it is evident that it cannot fully address the credit needs of low-income households. In this context, instant loans of small ticket-sizes from formal sources could be a substitute for costly informal and MFI loans. The increasing adoption and use of mobile phones among low-income households can generate non-traditional data points (such as mobile call data records and bill payments, internet browsing patterns and social media behaviour) that can be used to assess the creditworthiness of previously ‘invisible’ borrowers using advanced analytics.

The initial design of this study was to pilot the “no frills” small loan product designed by Bank Asia with Grameenphone agents in Bangladesh, using a randomized evaluation.  The aim was to understand the impact of alternative digital credit scoring to offer hassle-free working capital to the MSME segment, i.e. Grameenphone agents, as well as measure the social impact on consumption smoothing and income generation. Due to operational challenges and with the Covid-19 pandemic affecting all field activties in 2020, the scope of the study was revised. The revised methodology and objective of the study was to conduct an assessment of the factors associated with MSME’s interest in small loans, and improve our understanding of the role that such financial products can play in their credit portfolio. Further, we tried to understand the preference for different credit features by MSMEs, with the aim to use the findings to inform the development of credit products by Bank Asia and other financial institutions. Additionally, data on the immediate effect of the COVID-19 crisis and the ensuing lockdown on the Grameenphone agents was collected.


Two rounds of phone surveys were conducted with Grameenphone agents. The agents were selected randomly from the list of 5,500 shared by Grameenphone. Agents were called a maximum of four times over two days, before they were determined as not reachable. The baseline survey was conducted with 501 agents in June and July 2020, and the follow-up survey was conducted with a subset of 104 respondents from the baseline sample, in September 2020. This survey was conducted to gain a more nuanced understanding about the existing loan repayment patterns of the Grameenphone agents, loan feature preferences and household dynamics (i.e. saving behaviour and change in household income due to COVID).


Findings from the study together with the information collected on the businesses, socio-demographics and loan feature preference would aid in better understanding of the potential usage of small loans among MSMEs. 

Thematic Area

Financial Well-being and Social Protection

Project Leads

Iris Braun, Parul Agarwal




Grameenphone, Bank Asia