Just a few years back it would have been unimaginable in the remote rural villages of Satkhira for Anzuara, a smallholder farmer, to have a bank account. Now Anzuara can check her bank balance on her mobile phone. Thanks to UNDP, Bank Asia and Bangladesh Government supported SWAPNO project for digital financial inclusion and literacy for extreme poor women such as Anzuara. Through SWAPNO, UNDP tested an e-payment “Government to People” initiative which enabled women on public works employment in Satkhira and Kurigram to receive their wages digitally from established collection points. Digital payment saves travel time by ensuring better accessibility of collection points and time-reliable payments. Currently, all SWAPNO beneficiaries [MAQ1] have individual bank accounts and each woman receives BDT 67500 in wages, With further financial and technical support from UNDP and Bank Asia, SWAPNO is now expanding its digital payment reach to more than 3000 public wage employees in Satkhira. It will also be introducing additional adapted financial products to these beneficiaries such as savings and providing financial literacy training to address attitude and behavior in terms of investment and savings.
Bangladesh’s accelerated spread of digital financial services is run by over 750000 mobile money agents and over 3200 agent banking outlets. According to Bangladesh Bank, 18 banks currently provide digital financial services, 767,768 mobile money agents are operational with 56.9 million registered users and 30.7 active accounts, and BDT 1038 crore average daily transactions. This has been enabled through better mobile phone access and mobile broadband usage in remote areas; and the use of NID for simpler, more secure and effective customer acquisition.
Despite this acceleration in financial access, only 5% of rural adults are formally banked and even for those who are, total deposits and advances were only 17% and 12%, respectively (Intermedia and Melinda gates foundation, 2016).
This is because addressing financial inclusion holistically takes more than addressing access. For the rural poor, financial products like savings, insurance and loans have little significance, if earning a basic wage is a struggle. Furthermore, without an enabling socio-economic environment that creates prospective and secure investment opportunities, the take up of financial products is bleak. Thirdly, financial products cannot lead to inclusivity if they are not tailored to address the specific context of the rural poor. Fourthly, majority of the poor remain financially illiterate to be able to connect the functions of the financial products available to their specific need.
Collaboration between the private/financial sector and the social sector remains key to designing financial inclusion models that are sustainable, contextual and need oriented, and financial products that are demand driven and user friendly.