Gone are the days when you had to rely on paperwork for financial transactions. With the advent of Mobile Financial Services (MFS), Bangladesh is taking the lead in being one of the advanced countries that aim to digitalize transactions- which can be withdrawals, paying bills, and so on. Even people from rural areas can easily use MFS for carrying out transactions as they are usually done in a formal banking system. With the introduction of MFS in Bangladesh, it has achieved financial inclusion with a range of impacts that will be analyzed below.
With the introduction of MFS as a digital financial service, Bangladesh is becoming one of the biggest economies in the world. Remarkable economic growth has taken place in Bangladesh’s economy and MFS is one of the biggest reasons behind it. Instead of waiting in long queues and waiting for the transaction to take place in a formal banking system, people can easily access financial services from their mobile phones. Formal banking hours are limited so people might have to wait for a long period of time for paying their bills, completing their transactions, and so on. With the advent of MFS, people can easily benefit from more transactions because there are no limited hours for which people will have to wait for. Secondly, during the pandemic, people had to rely more on online transactions instead of being in-person in banks. With more transactions, more people even from remote areas have been introduced to MFS. This has led to more dependency on MFS for easy and fast transactions by staying safe at home. The introduction of MFS is leading Bangladesh’s economy to have a cashless society. Most industry experts believe that having a cashless society is an indispensable part of achieving further economic growth. Bangladesh will be able to be an upper middle-income country by 2031 and a developed country by 2041 by having more and more people become part of the cashless society.
Bangladesh has been able to achieve Vision 2021, commonly known as Digital Bangladesh, with the help of MFS. Bangladesh Bank, the Central Bank of Bangladesh has brought many people into the formal banking sector by issuing licenses for mobile financial services. Retail- e-commerce has been growing since 2020 and is projected to increase to BDT 25,500 by 2023. Because of the cashless economy, Bangladesh has to rely less on the paper currency which means the paper currency production cost has lowered while revenue collection has increased due to an increase in digital payment. As data is now becoming the raw product as a replacement for oil, Bangladesh is now becoming one of the countries that have a large amount of financial information making it one of the upcoming wealthiest countries around the world. Bangladesh has been able to achieve Vision 2021 because the MFS is one of the primary sources for financial transactions instead of the formal banking sector. Nowadays, people do not have to go through long and complicated processes for taking loans because MFS has made it easier. This has started to benefit students, micro-entrepreneurs, and marginalized people in meeting their emergency personal or business needs.
However, there are still a lot of challenges that can be explored to increase the impact of MFS in Bangladesh. While MFS has ensured financial inclusion by including a mass number of people in digital banking, there still remains a challenge as to how to educate them to use MFS efficiently and properly in order to best use the available services. Even though most of the adults in Bangladesh have access to the internet, they are barely able to send messages from their mobile phones. So they need to be taught how to best use the services available in MFS and it is still challenging because most of them are still unable to read the instructions in English.
Technology as well as the economy of Bangladesh is improving. MFS will gradually replace the formal banking sector with more facilities for a large number of people to use regardless of their background. A cashless society can guarantee that Bangladesh will soon become of an upper-middle-class country by 2031. With more hope built among the nation, it is possible to achieve financial inclusion successfully in the near future.