Agent branches of banks in Bangladesh experienced negative growth in loan disbursement in October, despite seeing a slight increase in deposit collection from September to October.
The most recent statistics from Bangladesh Bank show that around the country, agent branches received deposits of Tk30,626 crore in October.
But the entire loan distribution in October was only Tk674 crore, down Tk11 crore from the month before.
Data also showed that Tk685 crore worth of loans were disbursed in September.
Out of this, loans totalling Tk240 crore were given to city branches and Tk433 crore to villages.
In contrast, branches in rural sections of the country outperformed urban ones in terms of deposit collection.
In October, customers in these rural areas deposited a total of Tk24,719 crore, which is Tk476 crore more than the previous month.
In September, rural branches collected deposits of Tk24,243 crore.
On the other hand, in October this year, customers deposited a total of Tk5,907 crore in the city's agent bank branches.
At the same time, the amount of transactions in the branches of the agent bank also increased.
The total transaction in October was Tk59,770 crore, which is Tk475 crore more than the previous month.
In September, this transaction amount was Tk59,295 crore.
On the other hand, gas and electricity bills have been paid to the agents more in October compared to the previous month.
A total of Tk145 crore was paid to the sector during that month, the amount of which was Tk138 crore in September.
The amount of remittances in agent branches has also increased slightly.
Agents received remittances of Tk2,606 crore in the month of discussion, which is Tk172 crore more than the month before.
A total of Tk2,434 crore in remittances were sent by expats through agents in September.
Agent banking in Bangladesh
In 2013, the central bank of Bangladesh granted licenses to 28 commercial banks to operate agent banking systems throughout the country. This marked the introduction of the agent banking concept in Bangladesh.
Since then, there are already more than 16.5 million people who have agent banking accounts.
Lending activities are expanding along with deposit-taking. By August 2022, 14,509 agents were managing a total of 19,981 outlets.
Rural areas are where the majority of the agents (85%) and outlets (86%) are found (as of August 2022, according to Bangladesh Bank statistics).
However, services are provided by designated banking agents-who are generally local business persons with their own premises as agent banking outlets which are equipped with hand-held tabs and computers with internet connections, point of sale (POS) devices, mobile phones, barcode scanners, and biometric devices.
Agents provide select banking and financial services, such as cash in and cash out, utility payments, bank account openings, various savings instruments, and fund transfers.
At present, the number of banks operating agent banking activities has increased to 31, with the top five banks accounting for 78% of the outlets.
Bank Asia had the highest number of agents at 5,186 or 36%, followed by Islami Bank, Dutch Bangla Bank, City Bank and Brac Bank.
