Kumari Foneloan – Buy Now Pay Later in Nepal: Instant Loan, Pay on EMI
Kumari Bank, a commercial bank in Nepal, has introduced a Buy Now, Pay Later (BNPL) service, which allows customers to get a loan on EMI instantly directly from their mobile banking app.
The concept of instant loans via mobile banking app is not new. About a year ago, several banks, including Kumari Bank, had already launched the service, dubbed “Foneloan”, in association with F1 Soft, a fintech in Nepal. The service, however, did not previously offer the loans on an EMI basis; instead, the loans had to be repaid within 30 days.
But now, for the first time in Nepal, with Kumari Bank’s Foneloan Buy Now, Pay Later service, customers have the option to take a loan for up to 12 months and return it via EMI, all without the need to go to the bank.
Previously, we could do everything except take out a loan using the mobile banking app. This is how Foneloan was born. The response was positive, however, the loan repayment period was only 30 days. So we offer “Buy now, pay later”.
—Subash Sharma, CEO, F1Soft International
Who can use the Kumari Foneloan BNPL service?
The Kumari Foneloan BNPL service is currently only available to customers with payroll/salary accounts. The bank said the service will soon be available for normal savings accounts.
For the EMI model, the customer can subscribe to a loan of a minimum of Rs. 15,000 and a maximum of Rs. 2,00,000. The customer can choose to repay the loan in 3, 6, 9 or 12 monthly installments. However, not everyone is eligible for a loan of up to Rs. 2,000,000.
The bank uses its own analysis software to determine the loan limit and loan term for each customer. The amount and term of the customer’s loan cannot exceed the limit set by the analysis software.
According to Kumari Bank, the software automatically scans each customer’s account, looking at transaction history and other relevant details to give individual scores. Customers who meet the bank’s minimum credit score will be able to apply for a Foneloan.
Major factors that determine a client’s eligibility include average monthly salary/deposit, withdrawals and balance, continuity and variation in salary/deposit, status of existing loans, history of previous loans, etc
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How to use Foneloan Buy now, pay later?
A customer of Kumari Bank must have a mobile banking subscription to benefit from the Foneloan. You can download the app from play store or app store and activate mobile banking service.
The Kumari Foneloan Buy Now, Pay Later service will soon replace the traditional way of taking out small loans in Nepal due to the convenience of being able to get a loan and pay on EMI in seconds over the phone.
— Anish Tamrakar, Head of Digital Banking, Kumari Bank
The BNPL service can be used when paying for a product or service at any merchant that accepts Fonepay QR. When paying, simply scan the Fonepay QR code with the mobile banking app and select the “Buy now, pay later” option.
Next, you can choose the loan type and term, after which the loan is executed and payment to the merchant is made immediately. The client must repay the bank within one month or in EMI, depending on the loan modality.
Additional Information on EMI Settlement, Interest and Other Charges
the the bank takes 0.75% of the loan amount as a loan application fee. The EMI is calculated with 15% interest.
The EMI amount is automatically debited from the customer’s account on the EMI refund date and the EMI is settled. However, if the customer’s account balance is insufficient, the IME amount will be declared overdue.
Overdue EMI amounts are subject to daily interest, penalty interest rate of 2% and late fines of Rs. 300 each installment.
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