The Steady Emergence of Fintech in Bangladesh: Unleashing Prospects

The new flood in digital transactions in Bangladesh set off by the COVID-19 pandemic has recently been all the rage. Transactions through mobile financial services (MFSs) posted magnificent growth about 29.27% in 2020 than 2019as underprivileged people are now embracing branchless banking windows in bigger numbers than ever, according toBangladesh Bank adata.

It is because of FinTech; numerous individuals have been leading lives peacefully in this pandemic COVID-19. They can remain protected in their individual homes and still have continuous service of getting food, staple goods, and different items deliveredwithout any problem. Yet, there is a need to further automate and innovate the FinTech business in Bangladesh.

With expanding demands, this area would just continue growing in the coming years. Needless to say, the FinTech business in Bangladesh appreciates an unsaturated market overflowing with promising opportunities for bleeding-edge and innovative financial service.

The Digital Financial Services (DFS) Lab, a joint initiative by Bangladesh Bank and a2i, has been created to amplify and grow digital financial inclusion. Essentially, the lab assists in making the citizen-centric item and service innovation to empower rural e-commerce and promote financial literacy.

FinTechs are engaged in accomplishing PM’s set up mission of Digital Bangladesh. Bangladesh Bank, the national bank of Bangladesh, has likewise embraced the Digital Bangladesh approach. FinTechsaltogether measure about $7bn monthlytransactions, and the thought at the macro level is to drive financial inclusion through FinTechs.

The country’s digital landschapechangemaker platform Nagad, a dream-cum-reality, Mobile Financial Service (MFS) platform of the Bangladesh Post office,has been a milestone project.  Since its inception in 2018 has acquired around 35 million users and is set to obtain a banking operations license.Tanvir A Mishuk, managing director and the man behind the vision, also embarked on transforming the E-Commerce sector of the nation by digitalizing the lojesticservie partnering with the postal department before the launching of Nagad. The the payment service issue arries and heimmidetly plan for launching the servie with the support Bangladesh Post Office.

‘Shob Hobe Nagad-e– Everything is possible with Nagad’ is a campaign initiated by Nagad to increase its digital financial inclusion and ensured the digital life for all walks its users. When they have launched its commercial service they have also started with an impressive campaign ‘Pābēnabēśidēbēnakama – Get more, give less’ to attract customers by keeping the cash-out charge to the lowest in the country – a mere TK 14.50 per thousand and a TK 5.00 per thousand for cash-in. Nagad later remodify their offers and bring the charge of cash-out, a popular service in Bangladesh, to half of the market rate and that also help them to get popularity.

Lately, an MoU has been signed between Nagad and Robi – the second largest mobile network operator company of Bangladesh and a sister concern of Axiata Group Berhad, of Malaysian, to add the existing users to the latter’s financial umbrella. With that deal, customer onboarding become very ease which also signed with other mobile carriers as well including the market leader Grameenphone – majority hold by one of the top global telecom service provider Telenor Group.

Additionally, an MoU has been endorsed between Bangladesh Bank and ICT Division with the end goal of implementing an “Interoperable Digital Transaction Platform (IDTP). The activity aims to launch a digital payment service in all the regions,  considering the ‘Public ICT Policy 2018’. The platform aims to offer an Application Programming Interface (API) which will be utilized by FinTech associations to make a wide range of financial transactions, boosting digital financial inclusion.

It is predicted that by 2022, the FinTech Industry will grow up to USD 310 billion all around the world,with an average yearly development rate of 25%. While until 2018, the development was up to nearly USD 128 billion. The developing amount of 2019 unmistakably shows that the worldwide fintech area is yet to mature. This means that Bangladesh still has opportunities to expands and strengthen its Fintech sector.

Bangladesh is in a lucrative position and can profit incredibly from Fintech. The nation has a huge younger populace who can embrace innovation quicker and possibly become patrons of FinTech. The nation’s mobile subscription density is at a record-breaking high, accordingly lessening the last mile connectivity challenge. Macroeconomic development factors are additionally positive to catalyze the joining of more individuals into the formal financial service network. With supportive gestures from the regulators, the financial services intuition of Bangladesh should embrace and include FinTech within their digital transformation strategy

Despite the fact that only 47% of the number of inhabitants in Bangladesh is currently engaged with FinTech, ideally, the rest, 53%, will be under the umbrella of FinTech very soon. In any case, for this to happen, Micro Finance Institutions (MFI) need to make significant strides.

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