Launch of Bkash marks a new era on financial inclusion

July 25, 2011
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“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime” is an old saying. Let me extend this old saying this evening by adding – “Give a man a mobile phone and you have changed his life.”

“Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime” is an old saying. Let me extend this old saying this evening by adding – “Give a man a mobile phone and you have changed his life.”

Jokes aside, let me start with a bit of a background on financial inclusion.

From the very beginning of BRAC, we have talked about financial inclusion as being a very important entry point for any development activities involving the poor and the marginalized. It is the most important access people need to have any chance of moving out of poverty. For the past four decades, Microfinance has been playing a very important role in that aspect by giving people access to credit.

However, in an ideal world, they should be getting these credits from formal banks — just like they should be having access to formal banking services. But we do not live in an ideal world. Not seeing enough financial profits, the banks do not reach out to these people.

As a result, 7 out of 8 people in Bangladesh remains out of formal banking service. When these people remain out of banking service, they lose out not only from not having increased access to financial and savings instruments; the safety of their savings is often compromised.

To address that issue, BRAC has built savings mechanism in microfinance. However, when they save through Microfinance institutes, they do not always have immediate access to these savings.

Technology here can play a wonderful role to solve this problem. In terms of access to technology, something wonderful happened during the last decade in Bangladesh. Mobile phones took off like wild fire. It spread tremendously among the mass, penetrating even the most remote areas of Bangladesh. Access to mobile phone means access to technology, access to information and access to new services at people’s doorsteps.

In Bangladesh for every 2 people now, there is 1 mobile phone. So, while 7 out of 8 people remain out of banking service, half of those people, interestingly, have access to mobile phone.

Bkash makes this connection.

Bkash will make it possible for the unbanked people to have access to banking services using their mobile phones. Not only banking services which will be enable them to deposit and remit, all kinds of financial services including payments, salaries, social safety net allowances, domestic transfers etc will be possible through this system. This will then make the lives easier for those who are already banked too.

I have no doubt in my mind that these services will provide enormous social value for our under-served people. Beyond the direct benefits, the opportunity cost saved by the convenience of Bkash’s mobile banking, should be tremendous.

For BRAC Bank, Bkash’s parent company, which also has to make financial return for their shareholders, this is a new territory – a new opportunity. I am sure they will find innovative ways to serve what is otherwise known as the BOP or (Bottom of the pyramid) market.

At its 10th anniversary, BRAC bank, is continuing to evolve with time and all along has kept its, and to a large extent, BRAC’s original mission and vision of serving the underserved.

Bangladesh turns 40 this year. So does BRAC in the coming year.

While it’s important to celebrate the progress we have made as a nation and as an organization, it’s also important to be forward looking. As technology is evolving, more people, including our government, are thinking about how to use technology for the benefit of the ordinary citizens in providing basic services in a cost effective way. BRAC and all its subsidiaries and investments would like to play a key role on that.

The launch of Bkash is an important step towards that goal.

Congratulations to everyone in Bkash and BRAC bank who has made the path setting launch possible and we look forward to its success. Just like we celebrated 10 years of BRAC bank and BRAC university this year with a great sense of pride, 10 years down the road, we would like to look back to this day and remember that this is where it all started when we took the definitive step towards financial inclusion for ALL.

By Asif Saleh – BRAC, Director Communications, BRAC and BRAC International and former policy specialist with the Prime Minister’s office on mobile banking.

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