Last Thursday, the 2015 Gates letter identified mobile money as a transformative innovation for the next 15 years, driving faster improvement of the lives of people in poor countries than has ever been seen.
Those who are familiar with Bangladesh will not be surprised that bKash was profiled as one of the most exciting ecosystems for digital financial services. Though we still lag far behind Kenya in adult subscription rates (101 per cent vs. 4 per cent), bKash currently processes two million transactions daily and over USD 1 billion on a monthly basis. Their network of agents, identifiable by the bKash signs and posters hanging on shop walls or carts, has become a ubiquitous brand across rural and urban Bangladesh.
Despite the potential for technology as a leveler, it can often actually increase inequalities. Lower literacy populations may be more reluctant to use mobile money, lack access to sufficient information to make an informed decision, or struggle more with the change process. In the context of Bangladesh, one of the big concerns is the financial inclusion of women. Often a household’s phone stays in the male’s hands. Could putting the family finances on the mobile phone actually reduce a woman’s access? Phone ownership rates among men are far higher than women (76 per cent compared to 46 per cent). Furthermore early research on the use of mobile money shows that, at just 11 per cent, Bangladesh has one of the lowest rates of female participation in the world.
For these reasons, BRAC sees itself as key partner in working with bKash. Over the last four decades, we’ve built up a tremendous grassroots network of staff, community groups, and extension workers; a deep understanding of communities, and a lot of local trust. Together, we can ensure that Bangladesh’s poor and marginal populations are empowered to use mobile money securely.
In the early days, we used our own front line staff to recruit bKash’s first agents. We were one of the first to offer microfinance clients the ability to pay loan instalments or savings deposits over bKash. Last year, in partnership with the Bill & Melinda Gates Foundation, we launched an Innovation Fund for Mobile Money to support more experimentation and adoption of mobile money into our service delivery models.
Youth are very receptive to mobile money and can benefit greatly from using it. Our adolescent clubs are working with their members to help them understand the benefits of saving in a mobile wallet (such as your brother can’t “borrow” your money!), while our urban secondary schools are now collecting monthly school fees over bKash (preventing students from using the money to buy snacks instead).
We are also working in some of the most remote geographies in Bangladesh–where roads, electricity, and other infrastructure are still woefully underdeveloped, contributing to the concentration of poverty. Here there are very few agents. BRAC has the potential to make mobile money a viable livelihood for local entrepreneurs, enabling bKash to better reach the most unbanked.
All of the projects include a great deal of financial education for clients. For example, many of them have never had a PIN number before—it takes time to understand what it is and the importance of keeping it a secret from others. They need a lot of support to learn how to send money themselves. Most agents don’t have time for this, but BRAC does.
Finally, BRAC human resources policies are also instrumental to spreading the use of bKash. According to SN Kairy, CFO, BRAC and BRAC International, “BRAC reaches 135 million people through 110,000 staff. As we transfer part of our staff remuneration to be delivered via bKash, this will inspire our staff to believe in bKash, and help them spread its use to members of the community”.
In 2015, BRAC will be looking to start scaling up the most promising models. For those yet to show promise there is ever-greater need for mobile money providers and grassroots organisations to work together in transforming the lives of the poor.
Maria A May is the senior programme manager for BRAC’s social innovation lab, and microfinance programme.