Banks and mobile financial services (MFSs) have been urged to promote personal retail accounts (PRA) among small and micro merchants and service providers to enhance financial inclusion in the country.
They should come up with innovative ideas to encourage the small and micro entrepreneurs to enter the era of cashless transactions, speakers also said at program on Saturday.
The views came at a workshop on PRA jointly organized by the Bangladesh Bank (BB) and Asian Development Bank (ADB) at a hotel in the city.
Central bank executive director Md Khurshid Alam addressed the event as chief guest while ADB senior project officer (financial sector) Mohammad Rashed Al Hasan and BB additional director (payment systems department) Shah Zia-ul Haque also spoke at the program.
Alam, in his speech, said businesses in the informal sector contributed over 25% to the country's economy but they did not get loans from the formal banking channels for not having transaction history of their respective ventures.
Bankers needed to go an extra mile to bring such small businesses under the formal banking channels with proper branding of financial instruments like the PRA, which requires minimal documents that all micro entrepreneurs have, he also said.
Access to capital is a prerequisite to economic development, Alam said. “For example, if a street vendor has a PRA, it will enable the person to receive digital payments and keep records of transactions, which would result in making that vendor eligible for a loan from the formal sector.”
Hasan from ADB said instruments like the PRA can become very important for approximately 7.8 million micro and small enterprises, which are yet to come under the formal banking channels, in terms of their financial inclusion in the mainstream economy.
In a presentation, Haque said there was a big market for financial institutions if they can bring the country's over 14 million micro merchants like street vendors, daily commodity sellers, f-commerce owners, etc. under the banking channel.
He said over 60% of the micro merchants in the country are currently unbanked who can be a potential target for instruments like the PRA.
Opening of such accounts will be easy because the small traders will only have to submit a copy of national identification (NID) numbers and a copy of professional proof issued by a public representative or a relevant cooperative that the entrepreneur is a member of, he added.
He mentioned that it has been a troublesome work for small businesses to avail a trade licence due to requirement of documentation, while the PRA will be a befitting solution to bring those people under the banking channel.
