Finance Minister AMA Muhith has stated that the services of the banks and financial institutions have been developed over the years but their upgradation works are yet to reach the expected level.
Muhith came up with the remark while addressing a two-day national conference titled “Inclusive Finance in Bangladesh” at Bangabandhu International Conference Center in the city yesterday.
Institute of Microfinance organised the event.
Speaking as chief guest, the minister said, “A poor man is facing hardship to repay loan instalments at 27% interest rate although the country’s financial agencies have spent huge amount of money to provide those credit facilities.”
Country’s banks provide major services to their clients but every one admit government services have increased by 3-4 times compared to previous period, he also said.
Muhith further said the services of the country’s financial institutions wouldbe increased if the local finance institutions could create more innovative activities for their clients like commercial banks. Banks provide major finance services to clients. Besides a large number of micro-finance institutions come in the front to provide financial facilities to clients, observed the minister.
“But now the major problems of the country’s financial institutions is to arrange funds for their operation,” opined Muhith.
Muhith said, “The financial institutions have expanded across the country over last 20 years but they have imposed huge service charges to their clients. Those institutions will go further in the rural areas to reduce the poverty level.”
A research conducted by the Bangladesh Institute of Bank Management shows that financial inclusion of the total population was 39.76% in 2004 which rose to 56.42% in 2010 due to the opening of 90 lakh Tk10 farmers’ accounts in state banks.
There are around 9,000 bank branches along with about 18,000 branches of NGO-MFIs, 1,200 thousands post offices and 183,000 co-operative outlets totalling about 2.1 lakh branches/outlets for the 56.6 million economically active population - generating at least one financial service point per 270 people.
In 2011,Bangladesh Bank, the country’s central bank, issued Mobile Financial Services (MFS) Guidelines defining a model where MFS must be bank-led, but partnerships with regulated micro-finance institutions were made to reach customers.
Two MFS providers have emerged as early leaders: bKash of BRAC Bank and Dutch Bangla-Bank mobile banking.
Launched in 2011, bKash, initially a joint venture of BRAC Bank and the US based company Money in Motion, has emerged as the market leader with more than 15 million customers.
Following IFC’s investment, Bill & Melinda Gates Foundation, one of the largest private foundations in the world, also made an equity investment in 2014. The service provider has around 105,000 agent points nationwide to facilitate cash-in and cash-out services at every corner of Bangladesh.
