Fintech to stimulate economic growth

Once only the privileged few in society could afford a telephone set at home. Having a fixed line telephone connection was then a mark of social status. But with the advent of mobile telephony, the image of exclusivity that telephone once enjoyed is gone. And with the passage of time, the importance of this digital device in public life is growing at a faster rate. Now it is not the dumb old electronic device with which people could only talk with each other in the past. Consider, for instance, the mobile financial service (MFS) introduced in the country just over a decade back. By opening account with an online MFS, a person can now remit money, pay bills and perform a host of other functions instantly that in earlier times were time-consuming and full of hassles. According to an estimate, in October 2023, there were 217.7 million account holders with the different MFS providers in the country, whereas in the same month of the previous year (2022), the number was 187.5 million. In other words, the increase was by 16 per cent. The figures may appear confusing to some since in either case the number of mobile money account holders as mentioned is higher than the country's total population. This is due to the fact that a person usually can have more than one account with these MFS providers.
The Global System for Mobile Communications Association (GSMA), a worldwide platform of mobile network operators, informs that in 2022, the total number of mobile money accounts was 1.6 billion and compared to the year before (2021), it was an increase by 13 per cent. And the number of mobile money account holders in Bangladesh in the same year saw an increase of 12.56 per cent raising the total number of account holders to 191 million. Given this current rate of growth, Bangladesh will soon catch up with the global average on mobile banking clientship. And, as expected, the volume of money transactions using MFS accounts, too, increased significantly. Bangladesh Bank (BB)'s data, in this connection, reveals that in October last year (2023), Tk.36.46 billion was transacted through mobile money accounts. And by the end of December (2023), year-on-year, the number of transactions surged by 30 per cent to Tk. 1245.48 billion. This growth in the use of MFS to store and transfer money for paying bills, purchasing commodities online and performing multiple other functions is a clear indication of how fast the country is entering the era of financial technology (fintech) along with the rest of the world. And as anyone can own a mobile telephone set and start mobile banking by creating an account with an MFS provider by clicking some buttons on their handset and then operate it to carry out financial transactions, it is evidently a system without class or gender bias. In that sense, mobile banking is plebeian in character and hence inclusive. And it is also far more user-friendly than traditional banking. The government's launching of the National Financial Inclusion Strategy 2021-26 has proved to be an important mover to promote mobile banking system and include the unbanked people in the country's financial sector.
No doubt, mobile banking is facilitating people's increased participation in the economic activities. And with fintech within the easy reach of the masses, it is expected that, going by the report of World Economics (June 2023), the country's informal economy worth USD324 billion, which is 30.2 per cent of the entire economy, will help increase the government's revenue income as well as generate more employment opportunities in the economy.

[email protected]