A Closer Look at Financial Inclusion in Bangladesh

The story of financial inclusion in Bangladesh began with microfinance institutions, the success of which led to large-scale emulation of home-grown models, in parts of Asia, Africa and Latin America. Subsequently, the Bill and Melinda Gates Foundation began to make the case that financial inclusion would be better fostered through technological innovation, leading to the formation of the Alliance for Financial Inclusion (AFI) in 2008, recognized by the G20 as an implementing partner. In Bangladesh, policy-makers have recognized the social, economic and commercial importance of financial inclusion. The Bangladesh Bank has set up a Financial Inclusion Department and a National Financial Inclusion Strategy (NFIS) is currently being formulated. Given the country’s low banking sector and high telecommunication penetration, digital financial services (DFS) is expected to drive financial inclusion. In this thought leadership article (TLA), we consider the latest avatars of DFS, agent banking and mobile financial services (MFS), with a view towards their progress and challenges that remain; and offer insights for their development.

 

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