Agent banking is the most useful channel when it comes to providing financial services to the extreme poor, speakers told a national seminar at Amari Dhaka yesterday.
Development entities such as non-government organisations and micro-finance institutions (MFIs) are working to link clients with agent banking to provide better financial services, said Tania Sharmin, national technical co-coordinator of CARE Bangladesh.
The MFIs can work as agencies of banks in localities for greater financial inclusion, she proposed while addressing a panel discussion titled “Market system approach for financial inclusion of the extreme poor”.
Collateral is the major challenge faced when the rural poor try to get loans, so agents of banks, MFIs in this case, can act as guarantors inside localities, helping to provide loans at low interest, she said.
Working as a bank's agent, CARE Bangladesh disbursed around Tk 1.60 crore in loans through a card usable for select purposes only, in effectively reducing borrowers' non-business expenses, said Sharmin in a presentation.
Market systems can play a crucial role in helping Bangladesh address development challenges, said Zia Chowdhury, country director of CARE Bangladesh.
CARE Bangladesh-SDC Shomoshti Project and Innovision Consulting organised the seminar on “Application of Market System Approach for Extreme Poverty Alleviation and Promotion of Social Services”.
The seminar aimed at harnessing lessons from market-driven approaches on income and employment, financial inclusion, women's economic empowerment and provision of social services.
Bangladesh Bank data shows that the number of agent banking accounts more than doubled to 12.14 lakh in 2017 from that a year earlier. Of those, 62 percent were with Dutch-Bank Bank.
By 2017's end, the number of agents stood at 2,577, up from 1,646 a year earlier. Bangladesh Bank issued an agent banking guideline in 2013 and licensees started full-fledged operations in 2016.