'Agent banking contributing to financial inclusion in BD'

Agent banking which aims to provide limited scale banking and financial services to the underserved population through engaged agents under a valid agency agreement, is contributing to the financial inclusion landscape in Bangladesh.

As an alternative delivery channel, it is taking banking solutions to the last mile, discussants said at a seminar on 'Future of Banking: Agent Banking as Alternative Delivery Channel to reach the last mile', at a city hotel on Saturday, says a statement.

Business Finance for the Poor in Bangladesh (BFP-B) project organised the seminar with Deputy Governor of Bangladesh Bank (BB) and Project Leader of BFP-B project Ahmed Jamal attending as the chief guest.

BB Executive Director and Project Director of BFP-B project Md. Nazimuddin, and Deputy Team Leader of DFID Bangladesh Afsana Islam were present as speakers.

The speakers said both providers and policymakers are taking initiatives to proliferate and capitalise the potential of agent banking.

Although the central bank issued an agent banking guideline in 2013, the first banks started full-fledged agent operations in 2016.

Over the last five years, agent banking has come a long way but some hurdles need to be resolved to expedite its sustainable growth by creating more enabling regulatory environment while taking the stakeholder's views into account, they said.

BFP-B is a 6.5-year programme funded by UK aid/DFID from the UK government.

The BB and Microcredit Regulatory Authority are the implementing agencies, and the Financial Institutions Division of the Ministry of Finance of Bangladesh is the executing agency.

Nathan Associates London Ltd. is appointed as the management agency for the programme.

The programme aims to improve access to finance for MSEs and create economic opportunities for small business in Bangladesh through improvements in the policy and regulation of financial services, innovations in the nature and scope of financial services targeting the poor and strengthening of information systems supporting micro-finance and bank lending.

BFP-B has three components - Challenge Fund, CIB-Microfinance, and Policy Component.

It completed a policy study on 'Addressing Market Demand through Agent Banking: Lessons Learnt'.

The study focused on providing practical and effective policy recommendations to the regulators by analysing the overall demand, supply and regulatory bottlenecks and explore different kind of customers' financial needs and perception.

The main policy recommendations were around non-exclusivity of master agents, reducing turnaround time for agent approval, incentivised refinancing schemes for banks to allow credit disbursement through agent banking channels and introduction of digitised KYC.

General Manager of Sustainable Finance Department (SFD) of BB and Deputy Project Director of BFP-B Khondokar Morshed Millat moderated the panel discussion.

Deputy General Manager of Financial Inclusion Department of BB Mohammad Abul Hashem, Joint Director of Banking Regulation and Policy Department Iqbal Hossain and President and Managing Director of Bank Asia Md. Arfan Ali attended the panel discussion.

Representatives from different sub-sectors of financial sectors like banks, MFIs, mobile financial service providers, government agencies and development partners were also present at the seminar.