Bangladesh Bank Governor Ahsan H Mansur has stated that microfinance institutions will not remain sustainable without technological transformation due to high management costs.
He also emphasised the importance of recruiting 50% female agents in the agent banking network and relaxing credit card policies to increase loan limits, describing these steps as crucial for enhancing financial inclusion and transparency.
Speaking at the “Stakeholder Discussion on Interoperable Payments in Bangladesh” event at a city hotel on Monday, Mansur said despite previous failures, the initiative to launch an interoperable payment system would be successful this time.
The system will enable digital transactions across all platforms through a single gateway.
The event, organised by the Policy Research Institute (PRI) and the Gates Foundation, brought together top executives from the banking sector, mobile financial service providers, telecom operators, and policymakers.
The governor explained that the traditional microfinance model, which was effective in the 1980s, is no longer sustainable today due to high field-level network management and administrative costs.
He proposed that linking microfinance institutions to digital technology would reduce costs, simplify loan distribution, and ensure transparency. “Technology-based microfinance can become a financial tool for Bangladesh’s poor population in the future,” he added.
The Bangladesh Bank governor also highlighted that women outnumber men in higher education in the country, making it a realistic goal to recruit 50% female agents for the agent banking network.
This would help reach a large number of women who have previously been excluded from banking services, such as housewives, mothers-in-law, and daughters.
He further emphasised the importance of using credit cards as an effective financial tool rather than just a symbol of income or wealth.
To this end, the credit card limit should be increased, and banks will be encouraged to issue more cards, bringing transparency to transactions and facilitating tax collection.
The discussion also touched on the concept of nano-loans, where instant loans can be availed with a single button press. The Bangladesh Bank is currently assessing its functionality, and if successful, the loan limits will be increased.
However, a significant challenge remains in addressing the growing demand for cash.
The governor reported that the use of cash is increasing by 10 percent annually, resulting in a significant revenue loss. To combat this trend, digital payment systems through QR codes are being implemented at business establishments.
The central bank has requested local government authorities to make it mandatory for new businesses to display QR codes for payments when granting licenses.
In conclusion, Mansur stressed the urgent need for an integrated instant payment system in the country.
He openly acknowledged that a previous project had failed due to management and capital issues, but with the support of the Gates Foundation, a tested and time-proven model is now being implemented.
He expressed hope that, once launched, this system would usher the country’s financial sector into a new era.
The event also included insights from Pakistan’s RAAST system and a demo of mobile-based instant payment systems in Africa.
Emerging tech companies from Bangladesh showcased their innovative prototypes. In the afternoon panel discussion, representatives from Sonali Bank, Islami Bank, bKash, Nagad, City Bank, Grameenphone, Robi Axiata, and Bangladesh Bank exchanged views on interoperability, transparency, and the potential of digital transformation.
