Bangladesh un­banked poor hail ‘rev­o­lu­tion­ary’ ser­vice


For Re­hana Akhter, re­build­ing her life af­ter los­ing her leg in Bangladesh’s worst in­dus­trial dis­as­ter is an up­hill bat­tle, but her strug­gle is eased slightly by dig­i­tal tech­nol­ogy.

The 25-year-old has an elec­tronic bank ac­count on her mo­bile, giv­ing her ac­cess to fi­nan­cial ser­vices that have tra­di­tion­ally been out of reach for mil­lions of poor in Bangladesh and other de­vel­op­ing na­tions.

From the cap­i­tal Dhaka, Akhter sends in­ter­est earned on her one mil­lion taka (US$12,820) com­pen­sa­tion from the dis­as­ter quickly and cheaply to her 10-year-old son and par­ents back in their vil­lage.

“Life is tough for any­one who’s lost a limb. No­body gives you a job or cares about your pain,” she said of her in­juries suf­fered in the Rana Plaza gar­ment fac­tory com­plex col­lapse that killed more than 1,100 peo­ple in 2013.

“But the pain is partly re­lieved when you know that there are tech­nolo­gies to help you.”

Started in 2011 by a lo­cal com­pany called bKash, the elec­tronic bank­ing ser­vice has since ex­ploded in pop­u­lar­ity to be­come one of the world’s largest, with 17 mil­lion reg­is­tered ac­counts.

Bangladesh has been the heart­land of mi­cro­fi­nance thanks to the pi­o­neer­ing ef­forts of No­bel Prize win­ner Muham­mad Yunus, whose small loans em­pow­ered mil­lions of poor.

But the bKash Wal­let ser­vice has reached fur­ther, al­low­ing any­one with a mo­bile phone to re­ceive wages, send re­mit­tances and pay bills for a fee of less than two per­cent of the trans­ac­tion.

As bKash has grown, a string of banks that have tra­di­tion­ally snubbed the poor have started sim­i­lar ser­vices, with an es­ti­mated 22 per­cent of Bangladesh adults now us­ing mo­bile money.

“bKash has emerged as a very ef­fi­cient pay­ment ar­range­ment with end­less pos­si­bil­i­ties,” its MITe­d­u­cated chief ex­ec­u­tive Ka­mal Quadir told AFP.

“It’s a com­pletely new pay­ment in­fra­struc­ture, that has ac­cess to the coun­try’s rich and poor.”

Quadir cred­ited its suc­cess to its low cost and huge reach — about 100,000 bKash agents such as shop­keep­ers are em­ployed in vil­lages through­out the coun­try al­low­ing re­ceivers of elec­tronic money to get their cash.

“Any­body with a very ba­sic phone can trans­fer money any­where in the coun­try. You don’t need a fancy phone. A US$15 phone is good enough.”

The Bill and Melinda Gates Foun­da­tion has in­vested an undis­closed amount in bKash, a sub­sidiary of a lo­cal bank.

Fraught with Dan­ger

Like mil­lions of other Bangladeshis, Akhter was forced to leave her vil­lage years ago, in the western bor­der dis­trict of Jes­sore, to find work in one of the coun­try’s thou­sands of gar­ment fac­to­ries.

But phys­i­cally send­ing money back home was costly and of­ten fraught with dan­ger, re­sult­ing in ar­gu­ments with fam­ily mem­bers.

“In the past, there were times I sent money through my brother and once he never paid my son,” she told AFP at Savar, out­side the cap­i­tal, where she has been look­ing for a new job.

“Then I used to send money through courier ser­vices. But it took a day for the money to reach my fam­ily.”

A sur­vey of rick­shaw pullers last year in Dhaka showed 95 per­cent used the ser­vice for re­mit­tances, in­stead of giv­ing their cash to ex­pen­sive and slow couri­ers who ply the con­gested, pot-holed roads.

“It’s a huge break­through in in­clu­sive bank­ing,” said so­cial sci­en­tist Salahud­din Amin­uz­za­man, from Dhaka Univer­sity, who con­ducted the sur­vey.

“What we’ve found is that the mo­bile fi­nan­cial ser­vice has emerged as a big tool for sav­ings and em­power- ment,” he told AFP.

“It’s em­pow­ered mil­lions of women gar­ment work­ers who would oth­er­wise de­pend on male rel­a­tives to carry their in­come back to vil­lages.”

Trans­fers Top US$1.6 bil.

The poor world­wide have long lacked ac­cess to tra­di­tional ser­vices es­pe­cially in ru­ral ar­eas where banks con­sider build­ing bricks-and­mor­tar of­fices un­eco­nom­i­cal.

But nearly two dozen banks in Bangladesh have now de­vel­oped the ser­vice since bKash, with monthly trans­fers top­ping US$1.6 bil­lion in March, up about 12 per­cent from Fe­bru­ary, ac­cord­ing to the cen­tral bank.

Monthly util­ity pay­ments made us­ing bKash rose a whop­ping 62 per­cent dur­ing the same pe­riod as con­sumers turned to the mo­bile method, con­sid­ered more ef­fi­cient than wait­ing in queues.

“The im­pact is rev­o­lu­tion­ary. Now an agent of a mo­bile phone ser­vice can op­er­ate like a one-man bank branch, of­fer­ing all sorts of ser­vices that a bank nor­mally of­fers,” cen­tral bank spokesman A.F.M. Asaduz­za­man said.

Thou­sands of shops and other re­tail­ers are also mak­ing and ac­cept­ing pay­ments us­ing the ser­vice.

Ahamad Ali, a gar­ment shop owner some 200 kilo­me­ters (124 miles) west of Dhaka, hailed bKash as a “god­send” af­ter years spent car­ry­ing cash to buy clothes from whole­salers and run­ning the gaunt­let of crim­i­nals.

“In just one year, my shop’s sales through bKash has grown by more than 10 per­cent and our pay­ments to cloth mak­ers by 20 per­cent.”

“It saves you valu­able time and cuts the risk of be­ing robbed.”


In this pho­to­graph taken on June 19, a bKash agent sits in his shop in Dhaka. Bangladesh has been the heart­land of mi­cro­fi­nance thanks to the pi­o­neer­ing ef­forts of No­bel prize win­ner Muham­mad Yunus, whose small loans em­pow­ered mil­lions of poor.

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