Economists suggest faster mobile financial services (MFS) expansion and simplification of their operations for getting vast multitudes of unbanked people on board for their financial inclusion.
Mobile financial services can play a significant role in bringing more unbanked people under formal channels if proper policy support from the government is provided, they said at a programme Tuesday.
However, despite the introduction of many MFSs in the country, only a few are on track to reach breakeven as there is still a trust deficit among the users on the services, the speakers said.
The observations came at a workshop titled 'Financial Inclusion in Bangladesh: Requirements and Practices', organised by Policy Research Institute (PRI) in collaboration with Economic Reporters' Forum (ERF) at the ERF office in Dhaka's Bijoynagar area.
Bangladesh Bank (BB) Executive Director Debdulal Roy addressed the programme as the chief guest while three papers were presented by PRI Executive Director Ahsan H Mansur, its research director Dr MA Razzaque and director Dr Bazlul Haque Khondker. Presided over by ERF president Sharmin Rinvy, the event was moderated by ERF general secretary SM Rashidul Islam.
In his speech, Mr Mansur said in 2010, bKash started off as the first MFS in the country through the inclusion of marginalised people in financial services.
Currently, about 16 MFSs are providing financial services to over 100 million people, he noted.
"However, the growth of financial inclusion through MFSs hasn't been up to the mark as the services aren't simplified enough for all users yet," he says about the flipside of the fast-growing economic sector.
Besides, he adds, many of the MFSs have been counting losses for a lack of required policy support from the government.
The PRI executive director thinks the entire population of the country can be brought on board through financial inclusion through mobile banking if the sector gets requisite government patronage.
"We have realised the importance of financial inclusion during the pandemic when the government couldn't disburse the funds fully from the Prime Minister's cash-assistance programme to 5.0 million people due to lack of financial inclusion."
All the beneficiaries of the ex gratia were not on the government database, which deprived a number of them of getting the support in time, he says.
He noted that among the MFSs, people mostly send money, pay bills, remit from abroad, purchase goods, etc mostly through bKash while the rest haven't been able to perform like this.
Another MFS, Nagad, has been trying to grab the market but it has been facing difficulty getting a licence which is crucial for gaining people's confidence on the service, he mentions.
Meanwhile, the PRI research director said the government spent around Tk 280 billion for social protection which in most cases is disbursed manually.
"If the process can be done through formal banking channel, the financial inclusion would be better," says Dr Razzaque.
Citing Economist Intelligence Unit (EIU) Global Microscope Finance Report 2020 that ranked Bangladesh 44th out of 55 countries in terms of financial inclusion, Dr Khondker said financial inclusion is very important to alleviate poverty.
More poverty-stricken people and women should be included in the digital financing, he adds.
Delivering his speech, the BB executive director, Mr Roy, said government officials usually work according to laws and regulations for which there are fewer innovations.
But the government has been working to simplify mobile-banking services for more financial inclusion while setting up agent banking and sub-branches of banks is also encouraged, he told the meet.
Terming people's mentality a reason behind lower financial inclusion, he said only 18 per cent of the country's population has savings while the rate is over 28 per cent for many countries.
He also notes that the government can't disburse the huge money allocated for social safety-net programmes due to the unavailability of an inclusive database.
