Financial inclusion cannot just be a buzzword

Financial inclusion has become a major talking point in Bangladesh's development narrative. 

With the rise of mobile banking services like bKash, Nagad, and Rocket, alongside microfinance institutions such as Grameen Bank and BRAC, access to financial services has expanded significantly. 

Policymakers and development organisations often highlight these advancements as evidence of economic empowerment and poverty alleviation. 

But while access has improved, deeper challenges remain—especially for marginalised communities that struggle with financial literacy, digital access, and true financial independence.

One of the main issues is that having access to financial services does not always translate into effective usage. Many rural women, for instance, have mobile banking accounts registered in their names, but the accounts are often managed by male family members. Without direct control over their finances, they remain financially dependent despite being part of the formal banking system. 

In some cases, financial illiteracy is a major hurdle—some women I have met recognise money by the colour of the notes rather than their numerical value. While digital transactions are on the rise, the ability to make informed financial decisions remains uneven.

Cultural and social norms also shape financial behavior. In many rural communities, banking is still perceived as a man's responsibility, limiting women's ability to save or invest on their own. 

Even microfinance loans, which are largely targeted at women, often end up being controlled by male family members. These realities show that financial inclusion cannot be measured by the number of accounts opened but by how effectively individuals can use these services to improve their lives.

Another challenge is the risk of financial instability due to over-reliance on microfinance. While microcredit has helped many small entrepreneurs, unchecked borrowing has led to debt cycles for some low-income individuals. 

Without a strong understanding of loan terms, people may take on multiple loans from different sources, only to find themselves struggling with repayments. The idea of financial inclusion works best when paired with financial education, ensuring that people can make informed choices about their borrowing and spending habits.

The rapid growth of digital financial services has also introduced new barriers. Many elderly individuals and those with low literacy levels struggle with mobile banking platforms that require digital skills they may not have. 

While technology has made banking more accessible, it has also created a divide between those who can navigate digital transactions and those who cannot. Simplifying financial tools and providing better customer support could help bridge this gap.

For financial inclusion to have a real impact, the focus needs to go beyond just expanding services. Financial literacy programmes at the community level could help people manage their money more effectively. Women's financial independence could be strengthened through policies that ensure they have control over their own accounts. 

Financial products also need to be designed with accessibility in mind, making it easier for people with low literacy levels to use them without difficulty. Additionally, consumer protection measures could help prevent exploitative lending practices that push borrowers into financial distress.

Financial inclusion holds real promise, but it is not a one-size-fits-all solution. Simply having access to financial services does not automatically lead to financial empowerment. Addressing gaps in financial literacy, digital accessibility, and social barriers would make financial inclusion more meaningful for those it aims to serve. 

The challenge is not just about providing services but ensuring they truly benefit the people who need them most.

Zaima Choudhury is a development practitioner. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.