Mobile Financial Service (MFS) is becoming popular at a faster rate in Bangladesh than many of us could comprehend. At a gradually growing pace, more and more Bangladeshis are coming under the network, and even more are expected to avail the service in the coming days once banks start coming up with better offers. The service is aimed at the largely unbanked population of the country who still remain outside the domain of conventional banking as it is not possible to have bank branches in nearly 68,000 villages. According to Bangladesh Bank, in Bangladesh banking services are widely available only for urban and suburban citizens. But a significant portion of the population still lives in rural and remote areas of the country. These people are involved with different financial activities and have created a vibrant rural economy. If their economic contributions are recognized through formal banking channel then it will not only strengthen the national economy but also spur the growth of entire banking sector.
Therefore, money transfer through mobile account, or simply mobile banking, has become the right option for the vast unbanked segments. MFS has already left its mark as an efficient and low-cost service to the current users of the country. Mostly people of the low and middle income groups frequent the service providers at least once a month to send or receive money from any destination.
Many countries are moving to doorstep agent banking as this is the best solution. I have read some reports from Africa and learned a great deal about the way MFS has revolutionized many of the countries in that continent. The African experience is phenomenal indeed. Here are some of the headlines of articles written by renowned analysts (available on Internet): “Cashless Africa: Kenya's smash success with mobile money;” “Africa's mobile banking revolution: the poor now have access”; Mobile banking and mobile money are revolutionising the face of personal and business banking in Africa;” One article says that banks in the U.K. are trying to copy sub-Saharan Africa's "mobile money" market, which lets people and institutions transfer cash with a phone.
Peter Ondiege, the African Development Bank's chief research economist in the bank's Development Research Department says “a mobile phone is an ATM, a point of sale terminal and an internet banking terminal. It is also a bank cash card and debit card for your mobile account.”On the other hand, some western market analysts believe that mobile banking services, if they continue to grow at the current rate might “jumpstart” GDP growth of some developing countries. They find a link between mobile money and GDP and argue that the positive effects of mobile money on developing economies may in the next decade bring their GDPs closer to those of developed countries.
It needs no emphasizing that a silent revolution has already taken place in Bangladesh with the mobile financial service spreading all over the country. It is indeed an amazing growing phenomenon in the economy sector. We sincerely hope that the service providers will make the mechanism safer, hassle free and more customer-friendly for the common people and do their business at the same time.
The writer is Special Supplements Editor, The Daily Star.