UNB :
Financial inclusion in Bangladesh has witnessed ‘miraculous’ progress in 50 years, particularly since the advent of mobile financial services (MFS), till now that nearly 90% of the population is estimated to be covered by the formal banking system, MFS, and microfinance institutions (MFIs). This was according to the man who made financial inclusion a centrepiece of central bank policy.
Most experts agree that Bangladesh Bank’s policy support and realistic measures for enhancing common people’s access to the financial sector have helped the country to reach such a position.
The central bank’s thrust in this regard began during the tenure of Dr Atiur Rahman, who served as governor from 2009-15. In the six years since he left, the central bank has carried forward his vision.
As a policy, financial inclusion is recognized to have significant potential for improving the well-being for all, and especially for participants who belong to the poor and marginalized groups.
According to the World Bank’s 2017 Findex report, which looked at financial inclusion, the percentage of adults with financial accounts in Bangladesh rose from 31% in 2014 to 50% in 2017.
Till the introduction of MFS in 2012, that number stood at around 20% for a long time. A financial account is broadly defined by the index as an account at a bank or another type of financial institution. Now, Atiur Rahman believes 60% of adults are covered by the formal banking system, which increases to 90 percent if account opening and financial involvement through MFS and MFIs are included. According to Bangladesh Bank data, the country witnessed a huge jump in deposit accounts with banks during the 2019-20 fiscal. As of June 2020, the number of deposit accounts in the banking sector stood at 13.24 crore as of June this year, which was a 33.6% jump from a year earlier. The number of dormant accounts is estimated at around 10%.
The total deposits of the banking sector crossed Tk12,000 crore in 2020, from Tk678 crore in 1973, mobile finance deposits stood around Tk10,000 crore and the deposits with the MFI system crossed Tk1,000 crore recently, Dr Atiur said.
Comparing the central bank’s target of disbursing Tk26,000 crore in loans to the agriculture and rural sector in the current fiscal to only Tk100 crore set aside for the sector in 1973, Dr Atiur said it is very clear that Bangladesh “achieved miraculous success in financial inclusion and access to finance.”
