Access to credit for the poor
Arecent report, the Global Financial Inclusion Database (Global Findex) published by the World Bank in 2011 has ranked Bangladesh ahead of India and Pakistan but behind Sri Lanka in terms of access to formal financial services. Forty percent of all adults in the country have a functioning bank account that includes one-third of the poorest income people, and more than one in three women have a bank account in their own names.
This is no mean achievement when viewed in the context of bringing more people into the fold of formal economy.
The interpretations of the Global Findex are important for policymakers. The borrowing patterns of these groups or communities of people accessing financial services can also be ascertained, and interestingly enough, it provides an insight into what nature of financial products are being availed by the new bank customers for meeting needs such as healthcare.
We take an appreciative note of the government's efforts, through the central bank, to widen banking practices for farmers. Under the tutelage of Governor Dr. Atiur Rahman, a major thrust by Bangladesh Bank in 2009 oversaw nearly 10 million farmers open bank accounts for a nominal fee in an effort to lessen the gap between formal banking institutions and the poorest segments of society that include farmers.
Although hailed as a groundbreaking move, much remains to be done. For starters, most banks have neither the requisite branches in remote rural areas, nor do they have trained staff to cater to the unique needs of the prospective rural customer base. Given that there are healthy indications of growth of savings brought about by a change in attitudes and perceptions, coverage of financial services should be more inclusive of rural areas, particularly poor, small and middle farmers.
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