Collective approach needed for financial inclusion: experts

Staff Correspondent | Published: 00:00, Feb 17,2019

 
 

From left, Kamal S Quadir, chief executive officer of bKash, Md Arfan Ali, managing director of Bank Asia, Farzana Chowdhury, managing director of Green Delta Insurance Company, Bhavana Srivastava, associate director of Inclusive Finance and Banking of MicroSave, and Anirban Bhowmic, country director of Swisscontact Bangladesh, are seen at the Financial Inclusion Summit organised by the University of Liberal Arts Bangladesh at the Lakeshore Hotel in Dhaka on Saturday. — New Age photo

Financial sector experts on Saturday emphasised a collective approach among regulators, financial institutions and development partners for ensuring financial inclusion of country’s people.
They also said that financial institutions should have to develop a need-based model keeping in mind that one type of financial service was not applicable to all segments of people.
‘In my experience in last few years we have seen financial exclusion takes place in various forms in Bangladesh. Educated men and women in cities can be the last-mile customer,’ Anirban Bhowmic, country director of Swisscontact Bangladesh, said at the 2019 Financial Inclusion Summit organised by the University of Liberal Arts Bangladesh at the Lakeshore Hotel in capital Dhaka.
He said that the agriculture sector in Bangladesh was transforming itself from subsistence to semi-commercial and commercial level and big segment of entrepreneurs in the sector remained out of financial services.
They should be defined as last-mile customer, Anirban said.
‘If we look at the young population of Bangladesh, who are struggling for jobs largely, they don’t have market-oriented skills, they are also the part of financial excluded group,’ he said.
Anirban suggested financial institutions build up their capacity how to interact with the last-mile customers and how to develop various kinds of modules for various segments of people.
‘We need to sustain banking development and we need to take it to the every citizen of the country. Banking should be one of the fundamental rights for the people and basically in some countries you cannot exclude somebody from banking channel,’ said Md Arfan Ali, managing director of Bank Asia.
Agent banking is a great development in the country’s financial sector and 19 banks are working in the area, he said.
Arfan said most of the banks were very eager to go to the rural level because steady business model was now working and it was also paying dividend.
‘Another thing for the village people is the agriculture card. This is an innovative product, farmers can use agriculture card and it is one of the finance defined products for the people who can buy commodities, agriculture inputs from the retailers from the distributers,’ he said.
He said that collaboration among mobile financial service operators, development partners, insurance companies and regulators was the key for financial inclusion.
Kamal S Quadir, chief executive officer of bKash, said that people who were excluded from financial services needed to be included in the system.
‘When people put money under mattress, it does not create any value in the economy but when they use digital system, their money go to the banking channel and it is invested in development projects,’ he said.
Kamal said that bKash was a very customer-centric organisation and initially focused on people who did not have any bank account.
‘If we look at the financial behaviour of people in this country, we will see the average transaction size is around Tk 900. Banks with their own cost cannot provide financial service to common people with such transaction volume,’ he said.
‘A one-size design does not fit all,’ said Debbie Watkins, managing director of Fern Software.
She said that a customer-centric design could combine financial and non-financial services to provide a solution with holistic benefits.
Rebecca Rouse, director of Financial Inclusion Innovation for Poverty Action, said that digital transfers reduced sender’s and recipient’s costs and improved effectiveness.
She said that payments into female-owned bank accounts led to significant increases in both work and economic engagement especially among women particularly limited by prevailing gender norms.
Rebecca said that the electronic wage payment in Bangladesh readymade garment sector led to increase in formal savings.
Mobile money users reported better ability to cope with income shocks, she added.
Planning minister MA Mannan said that the government was working to eliminate poverty through financial inclusion.
‘The government has planned to achieve 10 per cent economic growth in next five years and hopefully we will be able to break the injustice of poverty and inequality,’ he said.
ULAB trustee Imran Rahman and director Sajid Amit spoke at the programme, among others.

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