Financial inclusion boosts economic development

Inclusive growth has recently become one of the world's most important policy goals and an issue of worldwide discussion, relevant equally in economies of the under-developed, developing and developed countries.  Governments, development partners and economists have given attention to inclusion in economic and social life, including wide or universal access to education, health care, social security, clean water and sanitation, and affordable transport and electricity.
Financial inclusion is the most recent topic to be added explicitly to the social inclusion agenda and promotes the need for access of all segments of the society to a range of financial services at affordable cost. These are the key elements of social inclusion that roughly aims at delivering financial services at an affordable cost to the vast sections of disadvantaged and low-income groups in a convenient manner with dignity. The United Nations in its blue book titled 'Building Inclusive Financial Sectors for Development' defines financial inclusion as 'access to the range of financial services at a reasonable cost for the bankable people and farms'. An inclusive financial sector has gained growing global recognition which leads to sustainable growth and development of a nation.
The G20 association of major world economic powers has recognised it as one of the four pillars in the financial sector reform structure of its Global Development Agenda and given it an equal standing along with financial integrity, financial consumer protection, and financial stability. In doing so, the G20 defined financial inclusion as
'a state in which all working age adults have effective access to credit, savings, payments, and insurance from formal service providers'.
The Bangladesh Bank has taken financial inclusion as a high policy-priority for inclusive and economic growth of the country. For an inclusive financial sector, the Bangladesh Bank has undertaken various comprehensive campaigns to take the financial services to the disadvantaged population of the country. Dr Atiur Rahman, Governor of the Bangladesh Bank, has described financial inclusion as a tool for combating poverty. As per his opinion, sustainable development processes are those that are broad-based and environmentally benign and equitably benefiting all population segments of the society.    
The Bangladesh Bank has revolutionised the concept of financial Inclusion by bringing formal financial services to thousands of households and small entrepreneurs who previously never had a relationship with a financial institution. And a great many of the newly-banked are women, low-income families, rural dwellers and members of marginalised groups e.g. religious and ethnic minorities. The financial inclusion covers various financial services like savings, finance, insurance, payment, remittance and financial advisory services that may be provided by the formal financial system like banks, non-banking financial institutions (NBFIs), insurance companies and so on.
Bangladesh has become a role model for financial inclusion. Inclusive growth for sustainable development has been the key agenda of the country over the years. The banking sector of the country is supporting this drive through bringing millions of unbanked population under the financial umbrella. Ensuring access to finance by the less privileged segments, especially those in the vast rural areas, empowering women and providing responsible green financing have the common initiatives of the banking industry as a whole in recent years.  
Access to financial service is an important tool to reduce poverty, boost economic development, empower women and achieve other development goals. The banking sector of Bangladesh, with very positive regulatory leadership, has been involved in these sustainable agenda. Besides non-government organisations (NGOs), the banking industry is actively involved in micro-finance activities covering remotest areas of the country.
Due to active participation of the banking industry, mobile financial services has been growing here at a rate of 30 per cent, which has made Bangladesh one of the top mobile banking markets in the world. There are 29.2 million  mobile bank account holders (almost one-sixth of the total population) and the number is increasing every day. Nearly 8.60 million Tk 10 farmer accounts exist in banks. More than 0.90 million students have bank accounts now. As a whole, the total number of bank accounts now stands at around 90 million or over 56 per cent of the total 160 million population, which is a remarkable achievement for Bangladesh compared to the least developed and developing countries.
The Bangladesh Bank has taken some epoch-making initiatives to widen the coverage of banking services, especially by including the disadvantaged section of the society in the formal financial system. A number of policy measures covering both deposit and credit products, some of which are very innovative for our banking system, have been taken in this regard. Among the initiatives, increasing availability of the highest quality banking services to the farmers, increasing the credit flow to the priority sectors like SME and agriculture, mandatory participation in agriculture credit programmes by commercial banks, easy and effective access to banking services for physically incapable people, extension of the loan period to the disaster-affected people, revolving crop credit limit system, refinance scheme towards the priority sectors and women entrepreneurs etc. are noteworthy.
Financial inclusiveness is the underlying concept or institutional forte of Islamic banking. In recent years, Islamic banking has shown remarkable contribution to inclusion of the poor and unbanked population across the country. It has spread its inclusive growth across the globe and at present has 38 million customers, of which 13 million or 35 per cent are in Bangladesh alone.
Islami Bank Bangladesh Limited (IBBL) is one of Bangladesh's largest banks, offering commercial and consumer financing, tremendously popular remittance services for migrant workers, and an Islamic microfinance programme for the rural poor, the Rural Development Scheme (RDS). The inherent social justice potential of Islamic economics is a rich and underutilised resource for financial inclusion and poverty alleviation. IBBL is focusing on BOP (Bottom of Pyramid) people by steering them into formal financial activity.
According to a new study, four in five households in Bangladesh have access to financial services. It becomes a reality by dint of improvements in the networks of banks and microfinance institutions as well as a booming mobile banking segment. Islamic banking in Bangladesh has spread its emerging wings to build the basement of the national economy with inclusive growth in this regard.
The Bangladesh Bank has embarked on financial inclusion from a strategic vantage point to align itself with the national and planned strategy of inclusive growth as reflected in both Sixth Five Year Plan and also the Perspective Plan. In the process, it has been able to reach millions of unbanked population which has helped the Bangladesh economy maintain a six plus growth rate for years. In this episode, at the advent of winter, the Banking Fair Bangladesh 2015 has certainly added a new dimension to creating awareness among the mass people about banking products and services. The fair aims at highlighting the financial literacy programme of the central bank at the national level. A fair of this kind will immensely benefit the young generation towards banking. Banking industry as a whole will get a huge scope to display their vast array of products and services, especially the tech-savvy products using the scope. The on-going financial inclusion drive of the BB will certainly lay a solid foundation for an inclusive growth process of Bangladesh.
The writer is Managing
Director and CEO of Islami
Bank Bangladesh Limited