Roundup: Bangaldesh still lags behind in mobile financial services

In Bangladesh, millions of people are still unbanked and rely on cash or informal financial services.

Traditional banking infrastructure is underdeveloped in the country which deprives Bangladesh poor people's access to the range of financial services, said the speakers at a seminar Tuesday in Dhaka.

They said the country is at present largely an over-the-counter (OTC) market. Because of this, they said unregistered mobile money users are generally limited to simply transferring money. For instance, while more and more people in developed countries use their accounts for advanced functions such as purchasing goods, receiving salaries and taking loans, in Bangladesh, mobile money use is heavily based on person-to-person transfers.

To give a big boost to the efforts made by the state machinery, the speakers urged the government to better engage the country's cell phone companies which with nearly 129 million customers serve people deep into the rural areas.

In the seminar of the Telecom Reporters' Network of Bangladesh (TRNB), they said mobile financial services in the country of about 160 million people has a lot of room to grow.

Against this backdrop, they said mobile phone operators can offer integrated mobile financial services in-built in the handsets in a bid to help the market grow faster.

Referring to the country's existing bank-led financial services, they said the non-banking institutions can also invest in an operator-led mobile financial service through online solutions.

The number of registered clients reached 36.5 million as of July this year, the Bangladesh Bank data showed.

It showed the number of transactions by July this year surged to 119.5 million, making the monthly transaction amount via mobile staggering 2,250 million U.S. dollars on an average.

Presenting a paper in the seminar, TRNB General Secretary Shamim Ahamed, a senior journalist of Bangladesh's leading bdnews24.com, said due to entry barriers industry lacks competition, adequate investment and innovation to foster market growth.

He said 29 financial institutions have the license to run MFS but 20 are in operation and two -- bKash and Dutch-Bangla Bank -- are widely visible with market activities.

bKash reportedly dominates the market with almost half of the market share followed by Dutch-Bangla Bank, with the rest of the 10 providers accounting for around a quarter of the total market share.

In the seminar titled "Financial Inclusion in Bangladesh: opportunities, challenges and way forward through 'Digital Financial Service' (DFS)" organized by TRNB with its President Rased Mehedi, a senior journalist of The Daily Samakal, in the chair, discussants said Bangladesh needs to involve every stakeholders both from the banks and the mobile operators.

And the country needs a level playing field if it's to prosper DFS, they said, adding Bangladesh is currently channeling all mobile transactions through bank-led companies.

Nurul Kabir, the secretary general and CEO of the Association of Mobile Telecom Operators of Bangladesh (AMTOB), the national apex body of all cellular companies, urged the relevant government authorities for allowing all banking and non-banking financial institutions to open their subsidiaries for running MFS.

He said mobile operators will immensely contribute if they are allowed to engage with the MFS.

"We're keen to broaden mobile financial services. We want many players to join our efforts to reach more unbanked people in rural areas," Bangladesh State Minister for Posts and Telecommunications Tarana Halim said.

Mobile operators should have the opportunity to engage with MFS so that they play their roles to reach more unbanked people in rural bangladesh, she said.

She stressed the need for healthy competition so that all stakeholders concerned may support the government's efforts to broaden financial inclusion.

Mahmud Hossain, chief corporate affairs officer at Bangladesh's largest mobile operator GrameenPhone, said mobile operators are really in a position to contribute to the efforts of the state machinery to expand significantly mobile financial services.

He said operators can offer integrated mobile financial services in-built in the handsets that can help the market grow faster.

Reyad Hasnain, Bangladesh country manager of Mahindra Comviva, a global leader in providing mobility solutions, said more steps needed to be taken to reduce cash transactions.

He also stressed the need for introducing more new services to squeeze cash money transactions.

Progga Paromita, a senior Bangladesh Bank official, said steps are underway to further broaden the MFS through offering conducive policies.

She said interoperability can be considered to make electronic payments in a convenient, affordable, fast, seamless and secure way through a transaction account. Endit