Dr. Mahboob Ali :
Abstract: Poor and underprivileged people should come under the banking system so that equitable distribution and social justice can be achieved. Informal sector is playing vital role than formal sector of the country. Micro savings should under the working purview of the micro investment for which social networking and community banking is needed. Research question of the sturdy is whether social networking and community banking can transform micro savings to micro investment? The theory was developed for considering financial inclusion, to attain equitable distribution and social justice. A theory was developed by Ali(2016) which need to be tested. The theory was also interlinked with some goals of Sustainable development goal. The theory which is in a process of development by Muhammad Mahboob Ali on Social networking, community banking and empowerment of people may be empirically tested in different countries of the world and also at Bangladesh by various researchers to give a structural formation, cost-benefit analysis, shadow pricing, validation and reliability of the theory in the real life scenario both global and domestic perspectives with a request to inform the result to the author.
Keywords: Micro savings, Micro investment, Community banking, Social networking, Social capital, empowerment of People, Gender equality
Introduction:
Poor people of the country often did not getting any sort of banking services. Without banking involvement they have to depend on informal sector. As such informal sector have been playing vital role in the economy without accountability and transparency. Micro savings ought to come under the operational purview of the micro investment through social networking and community banking based system is required. Otherwise micro savings cannot give good results rather it will have some problems which was raised in Uganda , Rawnda etc. countries. In case of Pareto’s optimality criteria of utility theory, Hicks, Kaldor and Scitovsky described that social welfare could be increased without making value judgments. As such Pareto optimality of the people can be attained in line of social welfare so that compensation package can be attained.( http://vle.du.ac.in/mod/book/print.php?id=12779,viewed on 1st June,2017). In the free market economy govt. can intervene at least invisible manner. For poorer people, govt. need to set up some procedure of redistribution, arranging equitable righteousness ,removing income inequality and to attain social justice.
Social networking is the exercise of intensifying the quantity of one’s business and/or social contacts by constructing acquaintances from side to side entities, often through social media along with social capital, social business and social investment. Social entrepreneurs are the people most able to deliver that innovation (Leadbeater,1997).This is a social structure entailing of persons or collections who are associated to each other, for example through relationships. When these networks are characterized in a database and with a web interface, it is frequently mentioned to as a “social network service”. However, in traditional system there is no web interface or social media but social capital, social business and social investment works
simultaneously. A social network perspective on strategic alliances can have both descriptive and normative outcomes that provide valuable insights for theories of strategic management, organizational theory, and sociology. Incorporating social network factors into our account of the alliance behavior of firms not only provides us with a more accurate representation of the key influences on the strategic actions of firms, but has important implications for managerial practice as well, many of which have yet to be explored (Gulat,1998). Interest rate on lending in the informal sector is very much high in Bangladesh than the formal sector of the country(Ali,2016).
Rahman (2013) described that financial inclusion promotes inclusive growth, productive capacity, youth employment and combats poverty by unblocking advancement opportunities for the disadvantaged poor. Lack of access to basic financial services leads to significant extent of social exclusion in education, employment opportunities and social safety net. The finance minister of Govt. of Bangladesh AMA Muhith has proposed to increase the volume and coverage of the government’s social safety net programmes in the 2017-18 fiscal year to improve the living standards of the poor in the national budget speech. He proposed to raise the number of recipients of old age allowance to 3.5 million from 3.15 million, widow and oppressed women allowance to 1.27 million, disability allowance to 825,000, education stipend for students with disability to 10,000 at both primary and secondary levels, and maternity allowance to 600,000.Tk11.35 crore has been allocated as a special allowance for transgender people, while the allowance for financially insolvent disabled people has been increased to Tk700 per month. In addition, the government will continue the existing social protection programmes, including the Vulnerable Group Development (VGD) programme. The government has already employed emergency schemes to provide 30kg rice every month to each of the 330,000 bona fide destitute and flood-affected families in Haor areas, the finance minister said in his budget speech.In addition, Tk57 crore has been allocated to provide cash assistance to the affected people on a monthly basis.Tk82.07 crore has been allocated for 91,447 beneficiaries under the Employment Generation Programme for the Poorest (EGPP).(Source: Dhaka Tribute,2nd June,2017)
Still in Bangladesh informal sector is much larger than formal sector where employment opportunity is very high in Bangladesh. In the country, 87 per cent of the labour force is employed in the informal economy according to the labor report on 2010. Those who working in the informal economy include wage labourers, self-employed persons, unpaid family labour, piece-rate workers, and other hired labour(Source: http://ilo.org/dhaka/Areasofwork/informal-economy/lang–en/index.htm,viewed on 1st March,2017).
Informal credit market in the absence of regulatory framework is working without any sort of hindrance in the country which needs to bring under supervisory framework. Siddique(2008) described that in the country credit is provided by informal lenders who may be friends and relatives, by mahjans who are intermediaries with trade and/or production relationships with enterprises ,and by traditional money-lenders. The informal market is potentially large and expanding. Below we have seen the informal credit market of the country in Figure:1 .
Interest rate in the informal market is much higher than formal market and job security as well as obtaining direct taxation form the informal sector is not feasible. As such social networking and community banking may help to convert formal sector.
Rahman(2017) quoting labor force survey 2015-16, majority of employment is generated in the agriculture sector, but employment is gradually shifting to the services sector. Contribution of service sector employment has been growing, with 36.9% of employment generated in 2015-16, compared to 34.1% in 2013 is shown in following Figure: 2.
