Financial Inclusion in Bangladesh through ICT

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Dr Atiur Rahman

Governor, Bangladesh Bank

egov’s Shally Makin talks to Dr Atiur Rahman, Governor, Bangladesh Bank, and discusses how technology has been deployed for financial inclusion projects in Bangladesh

How is Bangladesh making use of ICT for financial inclusion?
The Government of Bangladesh started this dream of Digital Bangladesh and financial inclusion came as a compliment to that actually. And when I became Governor, I thought this would be a strategic move and drove the idea that banks need to be much more inclusive and much more humane if one needs to flourish in this difficult time. Financial inclusion not only helps pull people out of poverty, it also creates internal demand which is helping us cope with the financial crisis.

The drive toward financial inclusion has been facilitated by the use of technology. Facilities such as electronic fund transfer, mobile banking, enterprise resource planning etc., have taken off in a short period of time.

Do you think PPP initiatives will be a good idea for financial inclusion programmes? 
We are already using PPP in a number of initiatives. For example, tenant farmers are getting money only because of the Public Private Partnership. The central bank in itself has gone for a partnership with the Largest NGO of the world and providing credit to the tenant farmers who normally do not get credit. About 500,000 of them are getting credit out of this initiative which we have taken. We are providing refinance facilities directly to NGOs and they are disbursing credit to farmers.

What are the major challenges you face in financial inclusion?
The global financial crisis is itself a big challenge as unless we have macroeconomic stability, financial innovations may be disturbed. We are not depended only on the foreign demand, as domestic demand is strong. Maintaining demand from outside will be a challenge. Additionally, the technology needs to be secure. We will move to mobile banking and online fund transfer only when we can assure the recipients that it is very secure. How to instil that confidence of security is a challenge. Ours is a bank led model, and thus the security part of it is taken care of, the KYCs are also taken care and the bank can have partnership with anybody. I encourage partnership but only the banks are made accountable and that gives a lot of confidence.

What are the plans for the coming five years?
We have already given license to 12 banks so we expect them to materialise. My dream is that when an ordinary garment seller needs to send money to her mother, she can do so anytime she wants, and her mother can just go a local agent and get the money. That will be the best outcome. I think nothing succeeds like success. Once her mother gets the money, then I will think that my financial inclusion is working.

Tell us something about the virtual credit cards
Virtual credit cards have been implemented for rural students as they don’t always have a means to have a international credit cards but they need to send money for exams, etc. so we asked the banks to give them virtual credit cards, infact the bank will have the credit card of their own and the students will come in there, they will get the code nos. put in their money and that code no. he/she can use through the internet anywhere and them send the money. This is a simple. It has already started in Bangladesh for about 6 months. 100 of students are getting benefits out of this. The banks are only marketing it themselves and I am encouraging them. I am giving all the regulatory support actually.

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