Along the route of financial inclusion

The lower income group of people living in the country's far-flung areas, who had completely been unfamiliar with the banking world since the day of birth are now changing their lot. This has been possible as the money circulation has increased in every nook and corner of the country to a great extent since the banking industry is leaving no stone unturned to bring every citizen under the banking network. They are doing this by introducing different cost-effective and lucrative products and thus adding an impetus to financial inclusion which is important for the country's graduation from the least developed country (LDC) status to a developed one.
Nearly half a dozen deposit products have been launched by both public and private sector lenders and these products have made access to finance in hard-to-reach areas possible within the shortest possible time. This has been a landmark example for the world to follow. Actually, immediately after taking over, the incumbent government has strived to bring the large number of unbanked people under the banking network so that they may lead their life as the citizens in developed countries do by getting involved in the financial world. There is no denying the fact that the banks' efforts have brought momentum in the financial inclusion.
It is important to note that Bangladesh is still lagging behind neighbouring India in terms of bank accounts, but it lies ahead of Pakistan. According to the report on Inclusive Financial Sector Development, United Nations-2006, the figure for Bangladesh stood at 25.5 per cent, India 44.3 per cent, Pakistan 17.1 per cent, Botswana 47 per cent, Brazil (urban) 43 per cent, Colombia ( Bogota) 39 per cent, Mexico City 21.3 per cent, Namibia 28.4 per cent, South Africa 31.7 per cent, Swaziland 35.3 per cent and Tanzania 6.4 per cent of the total population. The United States of America (USA) and the United Kingdom (UK) registered the bank accounts at 80 per cent and 88 per cent respectively of the total population.
In view of the global scenario the central bank of Bangladesh earlier issued a series of instruction to the commercial banks saying that the products, designed for the low-income group and physically-challenged people, must be taken to them by any means. Farmers' account, school banking, agent banking, accounts for street children and physically-challenged people are some of those products introduced for bringing the unbanked people under the banking network. Moreover, introduction of mobile banking has brought about another revolution as every mobile user has to connect with any bank for enjoying a number of facilities including sending and receiving money through any transaction that takes a few seconds.
Moreover, Mobile Financial Services (MFS) started in 2011. By 2017 there were more than 24 million bkash account holders, more than the number of people holding accounts in the formal banking channel in Bangladesh. They are playing a significant role in money circulation across the country. This has been appreciated by the people from all walks of life. They can now do any transaction within a few minutes thanks to the innovative ideas generated by the banks to bring all corners of the country under the coverage of financial inclusion.
Dr. Atiur Rahman, former governor of Bangladesh Bank, in his Joseph Mubiru Memorial Lecture held at the central bank of Uganda on November 20, 2009 said, "Financial Inclusion is a high policy priority in Bangladesh for faster and more inclusive growth." (Bangladesh Bank Quarterly, October-December, 2009).
To add an impetus to financial inclusion in the unbanked areas across the country, the agent banking model was introduced in 2013. It has brought about a tremendous change in the financial fate of the people who never got access to finance from banks throughout their life. The data released from the Bangladesh Bank (BB) show that as of March 2018, around 1,468,797 accounts were opened through 4,905 agent banking outlets where the majority of account holders are village people. Out of the total accounts, 1,257,539 were opened in remote areas and only 211,258 in urban areas. As of December, 2017 the number of accounts stood at 1,214,367 and the growth rate of account opening with agent outlets by the unbanked population stood at 20.95 per cent.
Inward remittance is considered one of the key economic engines for the country's economy. Agent banking outlets in recent times saw the rush of expatriate Bangladeshis' family members as well as kiths and kins back at home to receive the hard-earned money sent from different countries across the world.
The central bank's initiative to bring the school-going children who are not more than 18 under the umbrella of financial inclusion in the early age of their life has set another milestone in the country. This is also expediting the financial inclusion. The kids who are considered the future generation will fly abroad one day for pursuing higher education with their savings what they make from the school life. The Bangladesh Bank has revealed that up to June 2017 nearly 1.3 million accounts were opened by the tender age learners whereas the balance stood at Tk 11.3 billion.
With a view to bringing the distressed and lower income group of people under the banking network, various types of deposit schemes for the needy people, namely No-Frill Accounts (NFAs) having the minimum balance, have been introduced. Policymakers, experts and think-tanks cannot but appreciate the BB initiative to materialise the financial inclusion which was a dream a decade ago. Terming it a 'revolutionary change,' the Washington-based lender World Bank recently commented that Bangladesh set a classic example for the world in terms of the pace of financial inclusion. The number of farmers' accounts reached 9.2 million by the end of June 2017 from 8.9 million in the previous year. As of June 2016, sector-wise distribution of NFAs shows that the beneficiaries under the social safety net programme opened 9,190,054 accounts for farmers, followed by hardcore poor with 2,287,179 accounts, freedom fighters 201,113 accounts, physically challenged persons 160,176 accounts, small life insurance policy holders 98,932 accounts, food and livelihood security beneficiaries 97,782 accounts, national service programme beneficiaries 33,414 accounts, city corporation cleaning workers 9,734 accounts, and distressed rehabilitation beneficiaries 1,277 accounts.
Collective efforts of both public and private sector financial organisations are needed right now to net in the remaining unbanked population. The journey for access to finance in remote areas should never be stopped despite any financial trouble or scams either now or in future, since this holy operation by the banks must be treated as regular activities. Financial inclusion-related products should be reshaped time to time based on the practical scenario. Women's role in the financial sector must be ensured at an optimum level.
According to the Bangladesh Bank record, as of June 2017, readymade garment (RMG) workers contributed to financial inclusion by opening 230,143 accounts. The majority of RMG workers are absent in the financial world till now. About 2.5 million women workers in the RMG sector coming from financially-excluded areas of the country may be brought under the banking. The World Bank has already observed that financial inclusion for rural women in Bangladesh is primarily associated with female RMG workers.
According to the World Bank study, around 1.7 billion adult people of the world have no bank account. By 2017, around 58 million people in Bangladesh, aged above 15, had no bank account. Bangladesh needs to bring these people under the banking network fast. The public sector banks as well as foreign banks should come forward and join forces with the private sector banks for scaling up these activities, which can brighten the country's image. The need for increasing the branch network in hamlet areas is a must for raising the success rate of financial inclusion. Canada, Germany and France are among the countries which have made sure that more than 90 per cent people have bank accounts. Their mechanism can be replicated to improve the financial inclusion situation by adopting innovative strategies.

The writer is currently serving at the Social Islami Bank Ltd.
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