Banks are in a race to hook big business clients, ignoring any efforts to deepen financial inclusion, experts said.
“Financial inclusion is designed mainly for the unbanked population, but here, all are working for those who are already privileged and covered by the banking channel,” said Toufic A Choudhury, director general of the Bangladesh Institute of Bank Management.
Choudhury's comments came at a session during the second annual economists' conference of the South Asian Network on Economic Modelling (Sanem) held at the Brac Centre Inn in the city.
The hefty charges currently placed on mobile financial services are also a barrier to financial inclusion, he said.
At present, users have to pay 1.85 percent as commission.
“Financial literacy is another key to achieving optimum inclusion, and we need to run a very conclusive programme on that,” Choudhury added.
Banks are not innovative in product designing and they are only interested in the big borrowers, said Salehuddin Ahmed, former governor of the central bank.
“They have not offered any new or attractive product for the marginal people in recent times.”
Ahmed also called for a right balance of regulation by the Bangladesh Bank. “Over regulation and no regulation can never bring proper growth in the industry.”
On the mobile operators' willingness to participate in MFS, Ahmed said: “Before allowing mobile operators to offer this service, we need to rethink the service quality.”
In different countries, the mobile operators are offering attractive MFS.
In Bangladesh, the bKash model can be replicated, as it is not a bank and the mobile operators have a role as well, he added.
Interoperability is a major challenge in MFS as one operator's wallet holder cannot send money to another operator's wallet, said Anir Chowdhury, policy adviser of Access to Information project under the Prime Minister's Office.
They are working on introducing interoperability and ensuring security in digital transactions, he said.
Kamal Quadir, chief executive of bKash, the country's leading MFS provider, said only 2 percent of their 2.69 crore accounts have regular banking accounts, which shows its importance in deepening financial inclusion.
If the government allows mobile phone operators in MFS, some issues need to be kept in mind.
“Mobile operators are providing us with the channel. If they start the same service, it may give rise to discrimination.”
The daily transaction value through the MFS is close to Tk 750 crore, according to the BB. But Quadir said the actual amount may not cross Tk 200 crore.
The transaction value appears to be higher than the actual amount: one person just sends the money he/she received to another person, he added. Most countries that are successful in MFS run a hybrid model where banks, mobile operators and other stakeholders can participate, said Pial Islam, managing director of PI Strategy Consulting, a research firm working in this segment.
But in Bangladesh, the industry is only following a bank-led model, which cannot give the ultimate result in financial inclusion.
Around 70 percent of the government-to-government payment goes through the digital channel and a third of public-to-government transactions are also run digitally.
But for person-to-person transactions, only 3 percent have adopted a digital model. “So, there is scope for growth here,” Islam added.
The costs and financial literacy are the main challenges to financial inclusion, said M Anwarul Islam, deputy general manager of the BB's financial inclusion department/
At present, there are 4.11 crore MFS accounts but only 1.59 crore are active (that have made at least one transaction in the last 90 days).
“This also shows us why inclusion is not happening properly,” he added.