Savings through bKash expediting financial inclusion from rural backwater

At a time when Bangladesh is mapping out detailed plans with a view to realizing the Smart Bangladesh Vision 2041, the fact is - a significant portion of the population is still out of the ambit of financial inclusion. However, the silver lining is that MFSs are rising to the occasion to transform the current situation to bring unbanked and underbanked to the formal financial channel.

MFS market pioneer bKash has recently rolled out a new feature - savings opportunities for its millions of account holders – in collaboration with three banks and one Non-Banking Financial Institution (NBFI), opening up new avenues for people who are lagging behind in terms of financial inclusion and expediting digital transformation. 

Back in September 2021, bKash brought in the monthly deposit scheme in partnership with IDLC for its customers so that they can save money using their bKash account without taking the hassle of going to the banks with lots of documents to open a savings scheme. Three banks, namely Dhaka Bank, Mutual Trust Bank and City Bank then joined the initiative.  

Around 650,000 customers have so far availed savings scheme in these three banks and one NBFI since kicking off this facility. Customers are saving from Tk 500 to Tk 3000 per month through bKash with a maximum tenure of four years. 

This facility has not only made it easier for the MFS account holders to save money for a rainy day, but also creating snowball effect. 

The most significant one among all the benefits has been the fact that this initiative by bKash is playing an instrumental role in accelerating financial inclusion of the people hailing from rural backwater and marginalized groups. 

Despite exponential growth, a substantial number of Bangladeshis are yet to come under the formal financial channel. In such a backdrop, the opportunity to open deposit scheme through mobile financial service (MFS) is a bellwether for shifting financial trend, which will help include people belonging to the lowest rungs of the social ladder into the mainstream economy. 

bKash's Chief Commercial Officer Ali Ahmmed said, "After the pandemic, cross-sections of people have realized the significance of saving money while the same pandemic has encouraged people to lean towards digital lifestyle. bKash aims to take advantage of this and provide people with varied options to get involved in economic activities

"Collaboration with financial institutions to help our customers save their hard-earned money as deposits is just a step towards reaching everyone with the benefits of digitalization."      

According to information provided by bKash, 64 per cent of the customers who have availed this service are saving for meeting future needs, 28 per cent for financial security, 4 per cent for education expenses and the rest 4 per cent are depositing for bearing other kinds of expenses.

This opportunity is also opening up new window of opportunity for rural women, whose economic participation is meagre.  

Around 30 per cent of the customers who have opened savings scheme through bKash are women. This is having knock-on impacts on their lives. 

Ms. Majeda, a villager from Sarishabari upazila of Jamalpur said, "I did not have any bank account earlier. As a result, I could not save money for my son even if I had spare money sometimes after meeting my daily expenses."

"However, I am now saving money for my son through bKash in a bank. This has rekindled some hope in me for my son's future", she added.