Kazi Mahfuz Mamtazur Rahman
Ex-banker, Team Leader, Sarathi Project, Swisscontact Bangladesh
Email: kmmr1977@gmail.com
Walking down the villages of Bangladesh for the last few years, I see a change. A new era of retail banking is fast blooming giving the people in the periphery access to banking. It is a breakthrough that is providing basic banking services with a no frill account, providing minimum transactional tools, accessibility to the outlet and ease of service has made this client-friendly. This has become possible because of agent banking and mobile banking revolution in recent years in Bangladesh. The technology and regulations have enabled banks to come out of the brick and mortar structure to biometric POS terminals which is less expensive, easy to operate and user friendly. It’s back to basics- fingerprints!
People can open, operate, deposit, withdraw and transfer funds through fingerprints. As literacy is still a challenge in rural Bangladesh, it’s fundamental to make banking easy. As per Bangladesh Bank quarterly report of December 2017, 14 banks have started Agent Banking operation already. Naturally, the pioneer few banks have got the fast mover advantage with more than 1000 agent points. But nevertheless, this is spreading like wildfire. Rural Micro, Small & Medium Enterprises (MSME) entrepreneurs and individuals are taking it as a challenge and having decent profit or reaching breakeven point within1 or 2 years.
The most interesting part is their experience with it. The funding or finance which was hidden under the mattress or pillow cover, has come out in banking channel. Recent days, there are more and more foreign remittances coming into agent banking accounts which is very encouraging. It’s still a long way to go as the number of agent booths by all banks still less than 5000, but there are 86000 villages across the nation and more and more banks are yet to join.
Within next 5-10 years, it will be the new vertical of retail banking in Bangladesh, called Rural Retail Banking (RRB). Few banks will be bound to separate this operation from traditional branch-banking because of the modality and huge network. Reaching out to the bottom of pyramid is a tough task but the game is on.
It’s a whole new journey back to basics. Good luck Bangladesh!