bKash playing a role in users’ income generation: BIDS survey

bKash, the largest mobile financial services (MFS) provider in the country, has been playing a role in generating income for its users and leading them to spend more on consumption, which is ultimately contributing to the country's economic growth, a survey has found.  

The survey titled "Impact of Mobile Financial Services in Bangladesh – The case of bKash" was conducted by the Bangladesh Institute of Development Studies (BIDS) in 2018. It found that customers' net benefit from using bKash services was 4%.

"Mobile financial services can assist in the transfer of finances through rapid, secure, and efficient money transfers, which therefore has a positive impact on income, expenditure, and other household well-being factors," said the survey report.

According to the survey, if the amount of money received through bKash increases by 10%, income, excluding food-related sources, may increase by 0.5%, with per capita income's possible increase by 0.3% while income from fish farming may increase by 3.3%.  

Though MFS services have been gaining popularity fast across the country, a significant portion of the population still remains financially excluded. It was observed that even though 98% of households in Bangladesh had at least one mobile phone, 38.4% of them had an MFS account. Also, 24% of that 38.4% had bKash accounts, the survey found. 

The survey also tracked the monthly expenditure of families to assess the impacts at the household level. It was found that the monthly expenditure of the families using bKash was around Tk 3,126 while it was Tk 2,580 for families using other MFS platforms.  

On the other hand, the monthly income of families that do not use any MFS platform was Tk 2,887. 

One of the reasons why families that use bKash have higher expenditure could be due to higher non-agricultural income and higher expenditure on non-food products compared to other groups, according to the report.

Using bKash had a significant impact on women's ownership of resources as well.  It was found that women's ownership of wealth had increased by 14% and their participation in income-generating activities by 9%.  

Moreover, using another model in the study, it was found that a 10% increase in the amount of transactions through bKash increased women's wealth by 2.1% and increased their participation in income-generating activities by 1.1%.

The survey found that bKash agents were satisfied with their incentive structure. For bKash cash-out transactions of Tk 100, each customer is charged Tk1.85. Out of this Tk 1.85, the agent's share is 57%, the distributor receives 20%, the mobile operator receives 7% (currently MNOs receive session based fixed fees), and bKash gets 16%. 

bKash agents earn more than other MFS agents. It is important to note that people work as MFS agents together with other businesses. The MFS agent points are usually located in marketplaces, the report said.  

It also said since the beginning of its operation, bKash has been using the agent network to bring more people under financial inclusion.  The steady growth of mobile money transactions and bKash is related to that of the high number of customers and agents. 

The number of bKash agents stood at 240,000 at the end of last year, according to the company.

According to the survey, more than 14% of the people in rural Bangladesh use bKash to receive and disburse money. Most of the recipients are wives, parents (mainly fathers), and siblings (mainly brothers).

Among the remittance recipients, fathers tend to receive the highest (28.1%), followed by other male relatives outside the immediate family, with males accounting for 19.1% and cousins 12.9%.  

A large part of the money sent and received through bKash is spent on education and household. 74% of the recipients said they spend the money on consumption.  

The use of bKash is popular among people of both upper and lower classes. Due to the use of bKash money for consumption, the company is contributing to the poverty alleviation of the underprivileged classes of the society, according to the report.