Loan disbursement via agent banking jumps 56% in Oct-Dec

Loan disbursement through agent banking soared by 56% year-on-year, reaching Tk24,028 crore in the October-December quarter of 2024, driven by enhanced access to finance for rural populations, according to Bangladesh Bank.

In comparison, the disbursement during the same period in 2023 was Tk15,407 crore.

BRAC Bank leads the loan disbursement chart through agent banking, while Islami Bank ranks first in deposit collection. 

Meanwhile, deposits and remittance inflows through agents grew by 15.40% and 21.16% respectively, compared to the previous year.

Bankers said the gradual expansion of agent banking has enabled many rural individuals, previously excluded from banking services, to easily access them, driving the increased flow of loans.

Syed Abdul Momen, deputy managing Director of BRAC Bank, said, "Agent banking was launched to bring rural people into the fold of banking services. Previously, we distributed loans through other institutions in rural areas, but now, we are directly providing loans through agent banking."

He also mentioned that BRAC Bank has established nearly 1,000 outlets through agent banking, offering loans of up to Tk2 crore, with an average loan amount of Tk15 lakh per customer.

Deposits, loans through agents

Deposits through agent banking stood at Tk41,955 crore in the December quarter of 2024. However, the loan-to-deposit ratio remains relatively low at 57.27%, as most banks have yet to develop robust infrastructure for loan disbursement and recovery via agent outlets.

Despite banks being allowed to lend up to 87% of their total deposits - and Islamic banks up to 92% - the agent banking sector has a significantly lower lending ratio.

As of December last year, 31 banks operated agent banking services through 21,248 outlets managed by 16,021 agents. The total number of agent banking accounts reached 2,06,10,405, with 85.60% belonging to rural customers and 49.77% to female account holders.

Dutch-Bangla Bank led in account openings, holding 29.30% of the market share with 70,54,148 accounts. Bank Asia followed with 29%, Islami Bank with 20.92%, Agrani Bank with 4.18%, and Al-Arafah Islami Bank with 4.17%.

In deposit collection, the top five banks controlled 80.04% of total agent banking deposits, with Islami Bank securing the highest share at 39.03%. Dutch-Bangla, Bank Asia, Al-Arafah Islami Bank, and Agrani Bank followed.

On the lending front, BRAC Bank dominated, disbursing Tk16,152 crore - 67.22% of total loans issued through agent banking. The top five banks collectively accounted for 94.92% of all loans in this sector.

Bangladesh Bank introduced agent banking in Bangladesh in 2013 with an aim to provide a safe alternate delivery channel of banking services to the under-served population who generally live in geographically remote locations that are beyond the reach of the formal banking networks.