Gap between A/C shares of male, female users waning

Agent banking continues to narrow down the gap between shares of accounts of male users and female users with formal credit inflow, deposit netting and injection of inward remittance - marking a remarkable increase in once-neglected rural areas.
The persistent growth of accounts indicates the surging demand of agent banking across different segments of population.
Market players said the social structure in the rural Bangladesh was not favourable for participation of female population in the formal credit system even in a few years ago. But things have changed rapidly due to the intervention of agent banking mechanism.
They also said the concept has helped to break the social barriers, bringing this community in the banking system in recent years.
According to the Bangladesh Bank's (BB) latest statistics (January-March 2023), the share of female clients' accounts opened through agent banking increased by 10.43 per cent during this quarter, resulting in gradual narrowing down of the gap between the shares of male clients' and female clients' accounts.
With this surge, the share of female clients' accounts in agent banking rose to 49.19 per cent (93,13,480 accounts), while the male clients' accounts stood at 49.69 per cent (94,07,817 accounts), as per the data.
As of March 2023, lending through the agent banking system rose by 81.69 per cent year-on-year to reach Tk 116.67 billion. The amount of loans disbursed until March 2022 was Tk 64.21 billion.
Besides, over 65 per cent of the lending went to the rural areas, where the scope of availing formal credits was poor even a few years ago, according to the central bank's quarterly report on agent banking.
In terms of deposit, the volume of deposits grew by 25.73 per cent to Tk 316.41 billion until March 2023, in comparison with the corresponding period of the previous year when the figure was Tk 251.65 billion.
Agent banking is also playing a vital role in bringing inward remittance from the expatriate Bangladeshi workers, as the data showed around 44 per cent increase at the end of March 2023 when agent banking networks channelled inward remittance worth Tk 1.22 trillion. In March 2022, the figure was over Tk 84.71 billion.
There are a total of 21,099 outlets operated by 15,409 agents of 31 commercial banks across the country, and over 86 per cent of the outlets are located in rural areas, according to the BB statistics.
Seeking anonymity, a BB official said the amount of lending through agent banking was relatively low compared to the amount of deposit, as the loan to deposit ratio was 36.87 per cent by the end of March.
This is due to the fact that most of the banks are yet to develop feasible infrastructure for loan disbursement and recovery through agent outlets.
"Still, the trend of banks' engagement in lending seems promising, as more banks are coming forward to partake in lending in this quarter compared to the previous quarter," he added.
The BB introduced agent banking in Bangladesh in 2013 with a view to providing a safe alternative delivery channel of banking services to the under-served population, who generally live in geographically remote locations that are beyond the reach of the formal banking networks.
Talking to the FE, AVP and in-charge operations of Al-Arafah Islami Bank Ltd Md. Istiaque Hasan said they are witnessing a significant growth in agent banking operations in recent months.
"Some 80 per cent of the bank's total accounts came through our agent banking in 2022."
They collected deposit amounting to over Tk 41.26 billion through 713 outlets across the country up to March 2023.
He also said they have planned to raise investment through agent banking network in the coming days to contribute further to socio-economic development in the rural areas.
Talking to the FE, head of agent banking, financial inclusion and literacy of Modhumoti Bank Limited Mohammad Shahadath Hossain said they have intensified focus on the agent banking operations to serve more unbanked people, particularly in the rural areas.
Agent banking has started changing the macro-economic landscape in the rural areas with increasing participation of female clients in the formal credit system.
"More than 70 per cent of our agent banking account holders is female, and the number is growing. They keep adding value to the service, so profitability of the agents is rising."
With the value addition in place, people in the rural areas are now getting various types of services, like transactions, payments, remittance, mobile recharge, paying utility service bills, and insurance facilities, he added.

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