Commercial banks and mobile financial services (MFSs) have been urged to popularise personal retail accounts (PRA) among small and micro merchants and service providers to deepen financial inclusion in the country.
The banks and MFSs should come up with innovative ideas to encourage the small and micro entrepreneurs to enter the era of cashless transactions and revolutionise financial inclusion, speakers said at programme on Saturday.
The views came at a workshop on "Personal Retail Account", jointly organised by the Bangladesh Bank (BB) and Asian Development Bank (ADB) at a hotel in the city's Gulshan-2.
BB executive director Md Khurshid Alam addressed the event as chief guest while ADB Senior Project Officer (Financial Sector) Mohammad Rashed Al Hasan and BB additional director (payment systems department) Shah Zia-ul Haque also spoke at the programme, presided over by BB director (PSD) Badiuzzaman Dider.
Mr Alam, in his speech, said businesses in the informal sector contribute over 25 per cent to the country's economy but they do not get loans from the formal banking channels due to not having transaction history of their respective ventures.
The bankers need to go an extra mile to bring such small businesses under the formal banking channels with proper branding of financial instruments like the PRA, which requires minimal documents that all micro entrepreneurs have, he said.
Terming access to capital a prerequisite to economic development, the BB ED said that for example, if a street vendor has a PRA, it will enable the person to receive digital payments and keep records of transactions, which would result in making that vendor eligible for a loan from the formal sector.
Mr Hasan of ADB said instruments like the PRA can become very important for approximately 7.8 million micro and small enterprises, which are yet to come under the formal banking channels, in terms of their financial inclusion in the mainstream economy.
He said the authorities concerned can also consider the probability of disbursing Micro, Small & Medium Enterprises (MSME) loans through analysing the transaction history of the PRA of small businesses.
In a presentation, Mr Haque said there is a big market for financial institutions if they can bring the country's over 14 million micro merchants like street vendors, daily commodity sellers, F-commerce owners, etc. under the banking channel.
He said over 60 per cent of the micro merchants in the country are currently unbanked who can be a potential target for instruments like the PRA.
He said the central bank already issued a circular in this regard on November 16, 2020 detailing the requirements for opening PRA by the small businesses.
Opening of such accounts will be easy because the small traders will only have to submit a copy of national identification (NID) numbers and a copy of professional proof issued by a public representative or a relevant cooperative that the entrepreneur is a member of, he said.
He mentioned that it has been a troublesome work for small businesses to avail a trade licence due to requirement of documentation, while the PRA will be a befitting solution to bring those people under the banking channel.
The workshop was attended by representatives from different banks, MFSs and other financial service providers where the BB authority distributed a handbook on PRA and awareness posters.
