Agent banking thrives despite corona

Agent banking system has gained popularity in rural areas and bringing the unbanked populations under the mainstream banking umbrella.

The fourth quarter (October-December) report of Bangladesh Bank (BB) said the rising trend of agent banking amidst the Covid-19 pandemic signifies the huge opportunity to bring the rural unbanked people under the umbrella of formal banking services.

The BB report said agent banking has continued to grow in all dimensions during this entire quarter. Up to December 2020, 26 banks in Bangladesh have undertaken agent banking operations through 15,977 outlets of 11,925 agents.

The number of agents has grown by 17.34 percent and the number of outlets has grown by 13.99 percent throughout this quarter.

Agent banking is playing a pivotal role in providing financial services, especially for rural women, small business entrepreneurs and beneficiary of remitters. The number of accounts held by women has increased by 17.31 percent over the last quarter.

Loan disbursement to women/entrepreneurs, however, made up only 9.03 percent of the total disbursed through agent banking during the period.

Till December 2020, the total amount of deposit collected through agent banking stood at Tk 159.77 billion with loan disbursement and inward remittance distribution of Tk 18.9 billion and Tk 488.06 billion respectively.

Some 9,643,163 accounts have been opened through agent banking, of which 4,398,122 (45.61 percent) accounts belong to female customers.

As of December 2020, top five banks have opened 90.86 percent of the total accounts opened through agent banking. Bank Asia Ltd has opened 3,606,421 accounts, the highest number of agent banking accounts hosted by a single bank.

Bangladesh Bank spokesperson and executive director Sirajul Islam said on Monday that anybody in the remote areas can make transactions through agent banking at any time. “Agent banking is also cost-effective, safe and secured,” he added.

Md. Arfan Ali, managing director of Bank Asia Ltd, said mainstream banking is being facilitated through agent banking services.

The account opening ratio of agent banking was five times higher in rural areas, he said.

“Rural people do not take bank loans as much as the urban depositors do, so our bank has been investing the money in productive sectors to ensure optimum utilization of the deposits and in turn, contributing to the strengthening of the national economy,” he added.

Economic analysts said agent banking has been bringing the rural community under the banking umbrella to accelerate financial inclusion, which was earlier mainly driven by the non-governmental organization (NGO).