BD Post Desk
Agent Banking is a new concept that refers to providing financial services to the underserved population through engaged agents who conduct financial transactions on behalf of a particular bank. These agents or retailers who are usually the owners of outlets, are increasingly becoming an important distribution channel in reaching to the unbanked segment of the society in addition to the existing customer with a wide array of financial services specially to geographically dispersed locations.
In Bangladesh, several banks, mostly the private ones, have introduced Agent Banking as demand for the services is rising tremendously.
Agent banking is gaining popularity, particularly among Bangladeshis living abroad, because of its convenient and cost-effective nature.
The Agent Banking business has become so attractive for the banks that some banks have shifted their efforts from mobile banking and and gone for agent banking.
Role of Agent Banking:
• Bridges the gap between the bank and the unbanked people
• Makes banking services accessible to rural people
• Offers cost-effective banking services
• Minimizes the operating and establishment costs for banks
• Need for the launch of Agent Banking
• Over the years, Agent Banking has proved to be very effective for developing countries which lack access to formal financial services.
In Bangladesh, with more than 650 licensed Microfinance Institutions (MFIs) operating with a client base of around 40 million in different regions, the outreach of microfinance institutions is vast. While these MFIs have done a great job by targeting the poverty-stricken segment and providing small-scale financial services to these marginalized people, they have limitations as far as the regulatory framework is concerned.
As a result, the need for Agent Banking became more justified. If the vibrant banking sector is properly guided by the central bank guidelines, Agent Banking can ensure the access of the marginalized people to several financial services in remote areas.
It can work wonders in ensuring financial inclusion and materializing the dream of a poverty-free Bangladesh.
BD Post Desk