Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 1TABLE OF CONTENTS

2 MAJOR PLAYERS

2 KEY SECTORAL TRENDS

5 INWARD REMITTANCES & MFS

6 EXISTING RISKS TO THE SECTOR

7 INTERNATIONAL ACCLAIM

8 LOOKING AHEAD

Banking on Mobile Money

FOREWORDStarting its journey in 2011, mobile banking,commonly referred to as mobile financial services(MFS), has demonstrated phenomenal growth inBangladesh. The MFS sector now has about 15million registered users transacting over BDT 80billion (US$ 1.0 billion) per month through over500,000 agents. In 2013, the number ofregistered MFS users grew at about 12 per centeach month, with a CAGR of 266%. Meanwhile,cash transactions grew at a CAGR of 186%. Inthe month of March, the average daily moneytransaction amount through mobile bankingreached unprecedented levels - registering overBDT 4.0 billion (US$ 51 million). According toBangladesh Bank data, the total transactions forthe month rose to BDT 123 billion.

The remarkable development of MFS is betterappreciated in the context of the country’sdemographic/socioeconomic statistics: apotential market of 160 million people, medianage of only 23 years, and per capita income ofUS$ 840 per annum. The key statistics, however,are a banked population of 20% (i.e., those thathave access to formal banking services) andsecondly, a mobile penetration of 75%. Thus, theavailability of MFS has allowed the unbanked inBangladesh to skip several stages ofdevelopment of the banking sector, e.g., settingup of physical branches, and gradually enter theglobal community of the banked.

SAJID AMITAdvisorCenter for Enterprise and Society

THOUGHT LEADERSHIP ARTICLE MAY 2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 1TABLE OF CONTENTS

2 MAJOR PLAYERS

2 KEY SECTORAL TRENDS

5 INWARD REMITTANCES & MFS

6 EXISTING RISKS TO THE SECTOR

7 INTERNATIONAL ACCLAIM

8 LOOKING AHEAD

Banking on Mobile Money

FOREWORDStarting its journey in 2011, mobile banking,commonly referred to as mobile financial services(MFS), has demonstrated phenomenal growth inBangladesh. The MFS sector now has about 15million registered users transacting over BDT 80billion (US$ 1.0 billion) per month through over500,000 agents. In 2013, the number ofregistered MFS users grew at about 12 per centeach month, with a CAGR of 266%. Meanwhile,cash transactions grew at a CAGR of 186%. Inthe month of March, the average daily moneytransaction amount through mobile bankingreached unprecedented levels - registering overBDT 4.0 billion (US$ 51 million). According toBangladesh Bank data, the total transactions forthe month rose to BDT 123 billion.

The remarkable development of MFS is betterappreciated in the context of the country’sdemographic/socioeconomic statistics: apotential market of 160 million people, medianage of only 23 years, and per capita income ofUS$ 840 per annum. The key statistics, however,are a banked population of 20% (i.e., those thathave access to formal banking services) andsecondly, a mobile penetration of 75%. Thus, theavailability of MFS has allowed the unbanked inBangladesh to skip several stages ofdevelopment of the banking sector, e.g., settingup of physical branches, and gradually enter theglobal community of the banked.

SAJID AMITAdvisorCenter for Enterprise and Society

THOUGHT LEADERSHIP ARTICLE MAY 2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 1TABLE OF CONTENTS

2 MAJOR PLAYERS

2 KEY SECTORAL TRENDS

5 INWARD REMITTANCES & MFS

6 EXISTING RISKS TO THE SECTOR

7 INTERNATIONAL ACCLAIM

8 LOOKING AHEAD

Banking on Mobile Money

FOREWORDStarting its journey in 2011, mobile banking,commonly referred to as mobile financial services(MFS), has demonstrated phenomenal growth inBangladesh. The MFS sector now has about 15million registered users transacting over BDT 80billion (US$ 1.0 billion) per month through over500,000 agents. In 2013, the number ofregistered MFS users grew at about 12 per centeach month, with a CAGR of 266%. Meanwhile,cash transactions grew at a CAGR of 186%. Inthe month of March, the average daily moneytransaction amount through mobile bankingreached unprecedented levels - registering overBDT 4.0 billion (US$ 51 million). According toBangladesh Bank data, the total transactions forthe month rose to BDT 123 billion.

The remarkable development of MFS is betterappreciated in the context of the country’sdemographic/socioeconomic statistics: apotential market of 160 million people, medianage of only 23 years, and per capita income ofUS$ 840 per annum. The key statistics, however,are a banked population of 20% (i.e., those thathave access to formal banking services) andsecondly, a mobile penetration of 75%. Thus, theavailability of MFS has allowed the unbanked inBangladesh to skip several stages ofdevelopment of the banking sector, e.g., settingup of physical branches, and gradually enter theglobal community of the banked.

SAJID AMITAdvisorCenter for Enterprise and Society

THOUGHT LEADERSHIP ARTICLE MAY 2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 2

MAJOR PLAYERS

The banking sector in Bangladesh hasundergone significant structural andregulatory changes in recent years. Anenabling regulatory framework and prudentdecisions from policy-makers havefacilitated the robustness of this sector. Atpresent, there are 56 various types of bankswith around 8,500 branches operating in thecountry which include several new entrants.

A total of 28 banks have taken permissionfor mobile banking from the central bankand 19 of these have started providingmobile financial services (MFS). BRACBank's bKash, Dutch-Bangla Bank's mobilebanking, Islamic Bank's MCash, UnitedCommercial Bank's UCash, Trust Bank'smobile money, ONE Bank's OK mobilebanking are now the key players in themarket.1 Although there are 19 players in theMFS sector – the leading two – bKash andDutch-Bangla mobile banking – areresponsible for more than 95% of thetransaction value. Other players such asMercantile Bank’s MyCash and UnitedCommercial Bank’s Ucash are fast-growing,partly on account of their existing low levelsof penetration.

The market shares for the leading playershave been driven by investments indistribution network and customeracquisition, agent incentive structure andquality of technology platforms. bKash hasbeen dominant, with around 80% marketshare, for several reasons: effectivecapitalization of an early-mover advantagewhich led to partnerships with over 200

primary distributors in key locations;original branding/communication strategies;quick distribution deployment; and stronglocal and international institutionallinkages.2

KEY SECTORAL TRENDS

Mobile banking falls in the category of non-branch retail banking. It is worth comparingcosts of traditional and non-branch retailbanking. Whenever a retail bankingcustomer goes to a bank branch in order tomake a deposit, the bank will incur a cost ofaround Tk. 50-60 for the services rendered.3

Instead, if the customer withdraws cashfrom an automated teller machine (ATM),the cost to the bank reduces by 80%.Similarly, when the customer chooses totransact from a desktop or mobile handset,the cost to the bank comes down even more.Thus, in addition to facilitating affordabilityto customers, MFS also significantly reducescosts for banking businesses. It isforeseeable that MFS will eventually helpbanks streamline their portfolio of branchesand ATMs. This bodes well for the economyat large as banking costs have a significantimpact on the cost of capital in the economy,which is a determinant of macroeconomicgrowth and development.

At the broadest level, MFS constitutesoffering money transfer services including,but not limited to:

Cash-In (deposits) Cash-Outs (withdrawals) Person-to-person transfers (P2P) Business-to-person transfers (B2P),

e.g., salary disbursement

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 2

MAJOR PLAYERS

The banking sector in Bangladesh hasundergone significant structural andregulatory changes in recent years. Anenabling regulatory framework and prudentdecisions from policy-makers havefacilitated the robustness of this sector. Atpresent, there are 56 various types of bankswith around 8,500 branches operating in thecountry which include several new entrants.

A total of 28 banks have taken permissionfor mobile banking from the central bankand 19 of these have started providingmobile financial services (MFS). BRACBank's bKash, Dutch-Bangla Bank's mobilebanking, Islamic Bank's MCash, UnitedCommercial Bank's UCash, Trust Bank'smobile money, ONE Bank's OK mobilebanking are now the key players in themarket.1 Although there are 19 players in theMFS sector – the leading two – bKash andDutch-Bangla mobile banking – areresponsible for more than 95% of thetransaction value. Other players such asMercantile Bank’s MyCash and UnitedCommercial Bank’s Ucash are fast-growing,partly on account of their existing low levelsof penetration.

The market shares for the leading playershave been driven by investments indistribution network and customeracquisition, agent incentive structure andquality of technology platforms. bKash hasbeen dominant, with around 80% marketshare, for several reasons: effectivecapitalization of an early-mover advantagewhich led to partnerships with over 200

primary distributors in key locations;original branding/communication strategies;quick distribution deployment; and stronglocal and international institutionallinkages.2

KEY SECTORAL TRENDS

Mobile banking falls in the category of non-branch retail banking. It is worth comparingcosts of traditional and non-branch retailbanking. Whenever a retail bankingcustomer goes to a bank branch in order tomake a deposit, the bank will incur a cost ofaround Tk. 50-60 for the services rendered.3

Instead, if the customer withdraws cashfrom an automated teller machine (ATM),the cost to the bank reduces by 80%.Similarly, when the customer chooses totransact from a desktop or mobile handset,the cost to the bank comes down even more.Thus, in addition to facilitating affordabilityto customers, MFS also significantly reducescosts for banking businesses. It isforeseeable that MFS will eventually helpbanks streamline their portfolio of branchesand ATMs. This bodes well for the economyat large as banking costs have a significantimpact on the cost of capital in the economy,which is a determinant of macroeconomicgrowth and development.

At the broadest level, MFS constitutesoffering money transfer services including,but not limited to:

Cash-In (deposits) Cash-Outs (withdrawals) Person-to-person transfers (P2P) Business-to-person transfers (B2P),

e.g., salary disbursement

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 2

MAJOR PLAYERS

The banking sector in Bangladesh hasundergone significant structural andregulatory changes in recent years. Anenabling regulatory framework and prudentdecisions from policy-makers havefacilitated the robustness of this sector. Atpresent, there are 56 various types of bankswith around 8,500 branches operating in thecountry which include several new entrants.

A total of 28 banks have taken permissionfor mobile banking from the central bankand 19 of these have started providingmobile financial services (MFS). BRACBank's bKash, Dutch-Bangla Bank's mobilebanking, Islamic Bank's MCash, UnitedCommercial Bank's UCash, Trust Bank'smobile money, ONE Bank's OK mobilebanking are now the key players in themarket.1 Although there are 19 players in theMFS sector – the leading two – bKash andDutch-Bangla mobile banking – areresponsible for more than 95% of thetransaction value. Other players such asMercantile Bank’s MyCash and UnitedCommercial Bank’s Ucash are fast-growing,partly on account of their existing low levelsof penetration.

The market shares for the leading playershave been driven by investments indistribution network and customeracquisition, agent incentive structure andquality of technology platforms. bKash hasbeen dominant, with around 80% marketshare, for several reasons: effectivecapitalization of an early-mover advantagewhich led to partnerships with over 200

primary distributors in key locations;original branding/communication strategies;quick distribution deployment; and stronglocal and international institutionallinkages.2

KEY SECTORAL TRENDS

Mobile banking falls in the category of non-branch retail banking. It is worth comparingcosts of traditional and non-branch retailbanking. Whenever a retail bankingcustomer goes to a bank branch in order tomake a deposit, the bank will incur a cost ofaround Tk. 50-60 for the services rendered.3

Instead, if the customer withdraws cashfrom an automated teller machine (ATM),the cost to the bank reduces by 80%.Similarly, when the customer chooses totransact from a desktop or mobile handset,the cost to the bank comes down even more.Thus, in addition to facilitating affordabilityto customers, MFS also significantly reducescosts for banking businesses. It isforeseeable that MFS will eventually helpbanks streamline their portfolio of branchesand ATMs. This bodes well for the economyat large as banking costs have a significantimpact on the cost of capital in the economy,which is a determinant of macroeconomicgrowth and development.

At the broadest level, MFS constitutesoffering money transfer services including,but not limited to:

Cash-In (deposits) Cash-Outs (withdrawals) Person-to-person transfers (P2P) Business-to-person transfers (B2P),

e.g., salary disbursement

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 3

Person-to-business transfers (P2B),e.g., utility bill payment and mobiletop-up;

Government-to-person transfers(G2P), e.g., social safety netpayments

International remittances

In the prevailing MFS operating model inBangladesh, a customer can deposit orwithdraw up to BDT 25,000 per day, and isable to deposit or withdraw up to BDT150,000 per month. In case of moneytransfer, a customer can send up to BDT10,000 daily and BDT 25,000 monthly fromone mobile account to another.4

In addition to a strong banking sector and alocally adapted business model, there are ofcourse, other enabling factors that ensureproper functioning of an MFS operation. Aprofitable agent network, private sectorpartnerships and user adoption areparticularly important drivers of MFSgrowth. User adoption is arguably the mostimportant of these drivers, since the ultimatetest of a product is whether or not the end-customers find the product valuable and useit. A closer look at consumer needs,therefore, is edifying.

A survey conducted by the World Bank inBangladesh found that nearly 48% of theMFS users reside in urban areas while 32%in rural and 20% in semi-urban areas. Theaverage monthly income of MFS users inBangladesh is about BDT 8,000. Thisincome level is lower than the nationalaverage, but nearly 3 times the poverty-lineaverage income. The majority of MFS users

do not have bank accounts in formalfinancial institutions.5

Moreover, most of the low valuetransactions in the financial system now takeplace via MFS. The reason for this is that itis cheaper to send smaller amounts ofmoney through MFS than through othermodalities such as courier service.

Furthermore, although the sender-receiversplit is approximately 50-50 across thecountry, research suggests that rural usersare more likely to receive money, rather thansend money. The research shows a biggender gap among the users, with femaleusers constituting only 18% of the overalluser base. Person-to-person (P2P) moneytransfer, i.e., “Cash-in” and “Cash-out”, arethe two most popular types of transactions inmobile banking.

Adoption and use of mobile phones is theproduct of a social process, embedded insocial practice. Research shows that Word-of-Mouth (WOM) has been a particularlyeffective medium through which to generateawareness regarding MFS, especially inrural areas. TV has been effective withmarket-stratified advertisements being runby the leading MFS players, but researchyields that TV is more effective for reachingmale users than female users in rural areas.For the latter, WOM and relatives/friendsconstitute more effective channels throughwhich to learn about MFS and adopt it.6

Another important driver of MFS growth isa robust distribution model of mobilebanking agents who are profitable.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 3

Person-to-business transfers (P2B),e.g., utility bill payment and mobiletop-up;

Government-to-person transfers(G2P), e.g., social safety netpayments

International remittances

In the prevailing MFS operating model inBangladesh, a customer can deposit orwithdraw up to BDT 25,000 per day, and isable to deposit or withdraw up to BDT150,000 per month. In case of moneytransfer, a customer can send up to BDT10,000 daily and BDT 25,000 monthly fromone mobile account to another.4

In addition to a strong banking sector and alocally adapted business model, there are ofcourse, other enabling factors that ensureproper functioning of an MFS operation. Aprofitable agent network, private sectorpartnerships and user adoption areparticularly important drivers of MFSgrowth. User adoption is arguably the mostimportant of these drivers, since the ultimatetest of a product is whether or not the end-customers find the product valuable and useit. A closer look at consumer needs,therefore, is edifying.

A survey conducted by the World Bank inBangladesh found that nearly 48% of theMFS users reside in urban areas while 32%in rural and 20% in semi-urban areas. Theaverage monthly income of MFS users inBangladesh is about BDT 8,000. Thisincome level is lower than the nationalaverage, but nearly 3 times the poverty-lineaverage income. The majority of MFS users

do not have bank accounts in formalfinancial institutions.5

Moreover, most of the low valuetransactions in the financial system now takeplace via MFS. The reason for this is that itis cheaper to send smaller amounts ofmoney through MFS than through othermodalities such as courier service.

Furthermore, although the sender-receiversplit is approximately 50-50 across thecountry, research suggests that rural usersare more likely to receive money, rather thansend money. The research shows a biggender gap among the users, with femaleusers constituting only 18% of the overalluser base. Person-to-person (P2P) moneytransfer, i.e., “Cash-in” and “Cash-out”, arethe two most popular types of transactions inmobile banking.

Adoption and use of mobile phones is theproduct of a social process, embedded insocial practice. Research shows that Word-of-Mouth (WOM) has been a particularlyeffective medium through which to generateawareness regarding MFS, especially inrural areas. TV has been effective withmarket-stratified advertisements being runby the leading MFS players, but researchyields that TV is more effective for reachingmale users than female users in rural areas.For the latter, WOM and relatives/friendsconstitute more effective channels throughwhich to learn about MFS and adopt it.6

Another important driver of MFS growth isa robust distribution model of mobilebanking agents who are profitable.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 3

Person-to-business transfers (P2B),e.g., utility bill payment and mobiletop-up;

Government-to-person transfers(G2P), e.g., social safety netpayments

International remittances

In the prevailing MFS operating model inBangladesh, a customer can deposit orwithdraw up to BDT 25,000 per day, and isable to deposit or withdraw up to BDT150,000 per month. In case of moneytransfer, a customer can send up to BDT10,000 daily and BDT 25,000 monthly fromone mobile account to another.4

In addition to a strong banking sector and alocally adapted business model, there are ofcourse, other enabling factors that ensureproper functioning of an MFS operation. Aprofitable agent network, private sectorpartnerships and user adoption areparticularly important drivers of MFSgrowth. User adoption is arguably the mostimportant of these drivers, since the ultimatetest of a product is whether or not the end-customers find the product valuable and useit. A closer look at consumer needs,therefore, is edifying.

A survey conducted by the World Bank inBangladesh found that nearly 48% of theMFS users reside in urban areas while 32%in rural and 20% in semi-urban areas. Theaverage monthly income of MFS users inBangladesh is about BDT 8,000. Thisincome level is lower than the nationalaverage, but nearly 3 times the poverty-lineaverage income. The majority of MFS users

do not have bank accounts in formalfinancial institutions.5

Moreover, most of the low valuetransactions in the financial system now takeplace via MFS. The reason for this is that itis cheaper to send smaller amounts ofmoney through MFS than through othermodalities such as courier service.

Furthermore, although the sender-receiversplit is approximately 50-50 across thecountry, research suggests that rural usersare more likely to receive money, rather thansend money. The research shows a biggender gap among the users, with femaleusers constituting only 18% of the overalluser base. Person-to-person (P2P) moneytransfer, i.e., “Cash-in” and “Cash-out”, arethe two most popular types of transactions inmobile banking.

Adoption and use of mobile phones is theproduct of a social process, embedded insocial practice. Research shows that Word-of-Mouth (WOM) has been a particularlyeffective medium through which to generateawareness regarding MFS, especially inrural areas. TV has been effective withmarket-stratified advertisements being runby the leading MFS players, but researchyields that TV is more effective for reachingmale users than female users in rural areas.For the latter, WOM and relatives/friendsconstitute more effective channels throughwhich to learn about MFS and adopt it.6

Another important driver of MFS growth isa robust distribution model of mobilebanking agents who are profitable.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 4

According to a study entitled “AgentNetwork Accelerator Survey: BangladeshCountry Report 2014,” conducted byMicroSave (an international financialinclusion consultant) with financial supportfrom the Bill and Melinda GatesFoundation: 96% of mobile payment agentsin Bangladesh are profitable. 7 The study,conducted in March-April 2014,encompassed interviews with 2,490nationally representative mobile bankingagents. The study also found that the reasonwhy 96% agents are profitable has to dowith the relatively low operational costs ofMFS in Bangladesh.

However, most of the mobile banking agentsearn low profits due to the smallertransactions and commissions. About 75%of the agents earn less than US$ 100 permonth. Profitability is higher in urban thanrural areas. This is primarily due to thedifference in median number of transactionsper day. Urban areas experience 2 timeshigher median number of transactions perday than rural areas. The current transactionvolumes in Bangladesh are very lowcompared to East Africa, but theirprofitability, however low, is ensured by thefact that over 90% of agents are non-dedicated. In other words, agents operatepre-existing alternate businesses out of theoutlets they manage and thus incur lowadditional expenses for their mobile moneyservice. But as widely agreed by industryexperts, the relatively lower number and sizeof transactions is to be expected given thatthe service is still relatively new.8

The MicroSave study also highlighted thedevelopment of several unique systems foragent network management in Bangladesh’smobile financial sector, and that it is“yielding world class results,” especially inregards to liquidity management. DennyGeorge, a consultant at MicroSave, pointedout that on average, an agent conducts 30transactions a day, and often charges morethan 20 percent for a transaction.Meanwhile, in Kenya, still considered theposter child for MFS globally, 14% mobilebanking agents are reported to be incurringlosses. Kenya's M-Pesa is the leadingcompany in the global digital financeindustry. Not very far behind is Bangladesh-based bKash – a joint-venture betweenBRAC Bank and Money in Motion (a US-based venture capital firm).9

However, the report also indicated certainchallenges to MFS growth, e.g., the trendthat most customers conduct theirtransactions such as – Cash-In/Cash-Out –through agents’ accounts. Customers are stillhesitant to open their own accounts, whileagents open multiple personal accounts andprovide services. Moreover, about 13% ofagents reported that they encounteredproblems, e.g., sending text messages towrong numbers. According to George, “Ithappens as the agents handle multiple SIMcards to provide the service…there is a needto simplify the ‘Know Your Customers’norms in Bangladesh.”10

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 4

According to a study entitled “AgentNetwork Accelerator Survey: BangladeshCountry Report 2014,” conducted byMicroSave (an international financialinclusion consultant) with financial supportfrom the Bill and Melinda GatesFoundation: 96% of mobile payment agentsin Bangladesh are profitable. 7 The study,conducted in March-April 2014,encompassed interviews with 2,490nationally representative mobile bankingagents. The study also found that the reasonwhy 96% agents are profitable has to dowith the relatively low operational costs ofMFS in Bangladesh.

However, most of the mobile banking agentsearn low profits due to the smallertransactions and commissions. About 75%of the agents earn less than US$ 100 permonth. Profitability is higher in urban thanrural areas. This is primarily due to thedifference in median number of transactionsper day. Urban areas experience 2 timeshigher median number of transactions perday than rural areas. The current transactionvolumes in Bangladesh are very lowcompared to East Africa, but theirprofitability, however low, is ensured by thefact that over 90% of agents are non-dedicated. In other words, agents operatepre-existing alternate businesses out of theoutlets they manage and thus incur lowadditional expenses for their mobile moneyservice. But as widely agreed by industryexperts, the relatively lower number and sizeof transactions is to be expected given thatthe service is still relatively new.8

The MicroSave study also highlighted thedevelopment of several unique systems foragent network management in Bangladesh’smobile financial sector, and that it is“yielding world class results,” especially inregards to liquidity management. DennyGeorge, a consultant at MicroSave, pointedout that on average, an agent conducts 30transactions a day, and often charges morethan 20 percent for a transaction.Meanwhile, in Kenya, still considered theposter child for MFS globally, 14% mobilebanking agents are reported to be incurringlosses. Kenya's M-Pesa is the leadingcompany in the global digital financeindustry. Not very far behind is Bangladesh-based bKash – a joint-venture betweenBRAC Bank and Money in Motion (a US-based venture capital firm).9

However, the report also indicated certainchallenges to MFS growth, e.g., the trendthat most customers conduct theirtransactions such as – Cash-In/Cash-Out –through agents’ accounts. Customers are stillhesitant to open their own accounts, whileagents open multiple personal accounts andprovide services. Moreover, about 13% ofagents reported that they encounteredproblems, e.g., sending text messages towrong numbers. According to George, “Ithappens as the agents handle multiple SIMcards to provide the service…there is a needto simplify the ‘Know Your Customers’norms in Bangladesh.”10

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 4

According to a study entitled “AgentNetwork Accelerator Survey: BangladeshCountry Report 2014,” conducted byMicroSave (an international financialinclusion consultant) with financial supportfrom the Bill and Melinda GatesFoundation: 96% of mobile payment agentsin Bangladesh are profitable. 7 The study,conducted in March-April 2014,encompassed interviews with 2,490nationally representative mobile bankingagents. The study also found that the reasonwhy 96% agents are profitable has to dowith the relatively low operational costs ofMFS in Bangladesh.

However, most of the mobile banking agentsearn low profits due to the smallertransactions and commissions. About 75%of the agents earn less than US$ 100 permonth. Profitability is higher in urban thanrural areas. This is primarily due to thedifference in median number of transactionsper day. Urban areas experience 2 timeshigher median number of transactions perday than rural areas. The current transactionvolumes in Bangladesh are very lowcompared to East Africa, but theirprofitability, however low, is ensured by thefact that over 90% of agents are non-dedicated. In other words, agents operatepre-existing alternate businesses out of theoutlets they manage and thus incur lowadditional expenses for their mobile moneyservice. But as widely agreed by industryexperts, the relatively lower number and sizeof transactions is to be expected given thatthe service is still relatively new.8

The MicroSave study also highlighted thedevelopment of several unique systems foragent network management in Bangladesh’smobile financial sector, and that it is“yielding world class results,” especially inregards to liquidity management. DennyGeorge, a consultant at MicroSave, pointedout that on average, an agent conducts 30transactions a day, and often charges morethan 20 percent for a transaction.Meanwhile, in Kenya, still considered theposter child for MFS globally, 14% mobilebanking agents are reported to be incurringlosses. Kenya's M-Pesa is the leadingcompany in the global digital financeindustry. Not very far behind is Bangladesh-based bKash – a joint-venture betweenBRAC Bank and Money in Motion (a US-based venture capital firm).9

However, the report also indicated certainchallenges to MFS growth, e.g., the trendthat most customers conduct theirtransactions such as – Cash-In/Cash-Out –through agents’ accounts. Customers are stillhesitant to open their own accounts, whileagents open multiple personal accounts andprovide services. Moreover, about 13% ofagents reported that they encounteredproblems, e.g., sending text messages towrong numbers. According to George, “Ithappens as the agents handle multiple SIMcards to provide the service…there is a needto simplify the ‘Know Your Customers’norms in Bangladesh.”10

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 5

INWARD REMITTANCES AND MFS

In a low-income, low-literacy country, atechnologically-oriented sector such asmobile banking’s growth is driven by trust.In Bangladesh, mobile banking has gainedmuch popularity and trustamongstemployees of the apparel industrywho regularly remit their hard-earnedincome to their home villages. According tothe Bangladesh Bank, in the last four fiscalyears FY2010-13, the total inwardremittance was US$ 49.94 billion, averagingUS$ 12.49 billion annually, or about 11% ofthe country’s GDP. The growth rate ofremittance in these years stands at 13.4%,6.03%, 10.24% and 12.60%, respectively. Inorder to distribute remittance quickly toremote areas of the country, the BangladeshBank has approved the use of branch officesof micro finance institutions (MFIs) andbranches of the Bangladesh Post Office ascollection points for remittance money.Moreover, the Bangladesh Electronic FundsTransfer Network (BEFTN) came into beingin 2011 to simplify the bank-to-bankclearing process which also helps makequick delivery of workers’ remittance.11

A survey conducted in March-June 2014 oninternal remittances by rickshaw-pullersfound that a total of 76% of Dhaka’srickshaw-pullers send money home to theirvillages by mobile phone. It was commonlyperceived that sending money by mobilereduces risks and cuts costs. Among 461rickshaw-pullers surveyed from variousparts of Dhaka, 350 used their mobilephones to send money home. Most of therespondents were from remote locations –

chars of river islands in Rangpur, Kurigram,Jamalpur and Sirajganj. On average, eachsurvey respondent sent BDT 981 homeevery week.12 The rickshaw-pullers reportedthat sending money by mobile phone savedthem a lot of time and hassle. Previously,they had to remit money through people andit often would get misplaced and in case ofemergencies, it was difficult to send moneyat short notice. There were also risks tocarrying the money themselves.

Among the respondents, about 89% reportedtaking 10 to 15 minutes to send money homethrough mobile banking, and 11% reportedit took them more than 15 minutes. Therickshaw-pullers said they go to agentsshops to send money, and at home, theirfamily members collect it from agents intheir villages. In terms of recipients, 52%respondents sent money to their parents and32% to their wives. The money sent to afamily has myriad uses. The survey yieldedthat for 75% of respondents, remitted moneyis used to purchase food and otherhousehold expenses; for 31%, it is used forchildren’s educational expenses; for 35% topurchase land; and for 32%, to make smallinvestments. Remitted money is also used torepay debts.13

Professor Salahuddin M Aminuzzaman ofDhaka University’s Public AdministrationDepartment who led the survey said, “Thissurvey was carried out to determine howeffective Bangladesh Bank’s efforts wereconcerning inclusive banking, that is,bringing marginalized people under thebanking system. I was amazed at theextensive use of banking facilities. I

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 5

INWARD REMITTANCES AND MFS

In a low-income, low-literacy country, atechnologically-oriented sector such asmobile banking’s growth is driven by trust.In Bangladesh, mobile banking has gainedmuch popularity and trustamongstemployees of the apparel industrywho regularly remit their hard-earnedincome to their home villages. According tothe Bangladesh Bank, in the last four fiscalyears FY2010-13, the total inwardremittance was US$ 49.94 billion, averagingUS$ 12.49 billion annually, or about 11% ofthe country’s GDP. The growth rate ofremittance in these years stands at 13.4%,6.03%, 10.24% and 12.60%, respectively. Inorder to distribute remittance quickly toremote areas of the country, the BangladeshBank has approved the use of branch officesof micro finance institutions (MFIs) andbranches of the Bangladesh Post Office ascollection points for remittance money.Moreover, the Bangladesh Electronic FundsTransfer Network (BEFTN) came into beingin 2011 to simplify the bank-to-bankclearing process which also helps makequick delivery of workers’ remittance.11

A survey conducted in March-June 2014 oninternal remittances by rickshaw-pullersfound that a total of 76% of Dhaka’srickshaw-pullers send money home to theirvillages by mobile phone. It was commonlyperceived that sending money by mobilereduces risks and cuts costs. Among 461rickshaw-pullers surveyed from variousparts of Dhaka, 350 used their mobilephones to send money home. Most of therespondents were from remote locations –

chars of river islands in Rangpur, Kurigram,Jamalpur and Sirajganj. On average, eachsurvey respondent sent BDT 981 homeevery week.12 The rickshaw-pullers reportedthat sending money by mobile phone savedthem a lot of time and hassle. Previously,they had to remit money through people andit often would get misplaced and in case ofemergencies, it was difficult to send moneyat short notice. There were also risks tocarrying the money themselves.

Among the respondents, about 89% reportedtaking 10 to 15 minutes to send money homethrough mobile banking, and 11% reportedit took them more than 15 minutes. Therickshaw-pullers said they go to agentsshops to send money, and at home, theirfamily members collect it from agents intheir villages. In terms of recipients, 52%respondents sent money to their parents and32% to their wives. The money sent to afamily has myriad uses. The survey yieldedthat for 75% of respondents, remitted moneyis used to purchase food and otherhousehold expenses; for 31%, it is used forchildren’s educational expenses; for 35% topurchase land; and for 32%, to make smallinvestments. Remitted money is also used torepay debts.13

Professor Salahuddin M Aminuzzaman ofDhaka University’s Public AdministrationDepartment who led the survey said, “Thissurvey was carried out to determine howeffective Bangladesh Bank’s efforts wereconcerning inclusive banking, that is,bringing marginalized people under thebanking system. I was amazed at theextensive use of banking facilities. I

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 5

INWARD REMITTANCES AND MFS

In a low-income, low-literacy country, atechnologically-oriented sector such asmobile banking’s growth is driven by trust.In Bangladesh, mobile banking has gainedmuch popularity and trustamongstemployees of the apparel industrywho regularly remit their hard-earnedincome to their home villages. According tothe Bangladesh Bank, in the last four fiscalyears FY2010-13, the total inwardremittance was US$ 49.94 billion, averagingUS$ 12.49 billion annually, or about 11% ofthe country’s GDP. The growth rate ofremittance in these years stands at 13.4%,6.03%, 10.24% and 12.60%, respectively. Inorder to distribute remittance quickly toremote areas of the country, the BangladeshBank has approved the use of branch officesof micro finance institutions (MFIs) andbranches of the Bangladesh Post Office ascollection points for remittance money.Moreover, the Bangladesh Electronic FundsTransfer Network (BEFTN) came into beingin 2011 to simplify the bank-to-bankclearing process which also helps makequick delivery of workers’ remittance.11

A survey conducted in March-June 2014 oninternal remittances by rickshaw-pullersfound that a total of 76% of Dhaka’srickshaw-pullers send money home to theirvillages by mobile phone. It was commonlyperceived that sending money by mobilereduces risks and cuts costs. Among 461rickshaw-pullers surveyed from variousparts of Dhaka, 350 used their mobilephones to send money home. Most of therespondents were from remote locations –

chars of river islands in Rangpur, Kurigram,Jamalpur and Sirajganj. On average, eachsurvey respondent sent BDT 981 homeevery week.12 The rickshaw-pullers reportedthat sending money by mobile phone savedthem a lot of time and hassle. Previously,they had to remit money through people andit often would get misplaced and in case ofemergencies, it was difficult to send moneyat short notice. There were also risks tocarrying the money themselves.

Among the respondents, about 89% reportedtaking 10 to 15 minutes to send money homethrough mobile banking, and 11% reportedit took them more than 15 minutes. Therickshaw-pullers said they go to agentsshops to send money, and at home, theirfamily members collect it from agents intheir villages. In terms of recipients, 52%respondents sent money to their parents and32% to their wives. The money sent to afamily has myriad uses. The survey yieldedthat for 75% of respondents, remitted moneyis used to purchase food and otherhousehold expenses; for 31%, it is used forchildren’s educational expenses; for 35% topurchase land; and for 32%, to make smallinvestments. Remitted money is also used torepay debts.13

Professor Salahuddin M Aminuzzaman ofDhaka University’s Public AdministrationDepartment who led the survey said, “Thissurvey was carried out to determine howeffective Bangladesh Bank’s efforts wereconcerning inclusive banking, that is,bringing marginalized people under thebanking system. I was amazed at theextensive use of banking facilities. I

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 6

presume by now an even higher number ofrickshaw-pullers have availed thesefacilities.”14

Meanwhile, Hossain Zillur Rahman,Executive Chairman of Power andParticipation Research Centre (PPRC)indicated that the picture that emerges fromthe use of mobile banking technology is ofpeople’s empowerment. When an earningmember of a family is remotely located, thefamily is likely to experience financial andother insecurities; but with the advent ofmobile money and the ease with whichcapital is transferred thereby, thehelplessness is reduced. The survey, hesaid, reflects aspirations for a better life.

EXISTING RISKS TO THE SECTOR

As is the case in the early-stages oftechnologically-advanced financial serviceor sector’s development, malfeasance isafoot. Unregistered SIM cards are nowbeing widely used to conduct mobilebanking, raising serious concerns regardingillegal transaction of money. It is alsoreported that criminal elements useunregistered mobile SIMs and fake nationalidentity (NID) cards for opening mobilebanking accounts with banks providingmobile money-transfer services. Accordingto law-enforcement agencies, a good numberof such cases have been recently detected.They believe that more than 90% of mobilebanking accounts have been opened withoutproper verification of the subscribers’addresses. Law-enforcement agencies alsoreport that more than 78% of mobile SIMsacross the country are unregistered and these

are being used for money transactionsthrough mobile banking. An official of theSpecial Branch of a police unit said, “Thelaw enforcement agencies are getting morethan 350 complaints a month about illegalmoney transaction through mobile bankingacross the country.”15 He said the criminalsare using unregistered SIMs or fakeaddresses to open the mobile money-transferaccounts. As the criminals are usingunregistered mobile SIMs and fake NIDcards, the law enforcers cannot track themdown.”

The Bangladesh TelecommunicationsRegulatory Commission (BTRC) hasinstructed mobile operators to pursue thematter of vigilance against suchmalfeasance. Mr. Subhankar Saha,Executive Director of Bangladesh Bank,said the central bank is closely monitoringthe situation in context of various cases ofembezzlement and irregularities in themobile-banking sector. He added that thatthe central bank has also asked the mobile-phone operators to control the sale ofunregistered SIMs as a way of reducingillegal mobile money transactions.

Moreover, the central bank has recentlystrengthened its monitoring cell for MFSand penalized a number of MFS providersfor irregularities. The rationale for the bank-led model for MFS in Bangladesh was that itwould minimize settlement risks arisingfrom such transactions. Regulationsregarding mobile banking services transferresponsibility to individual banks toestablish anti-money laundering and anti-terrorism financing tools into their

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 6

presume by now an even higher number ofrickshaw-pullers have availed thesefacilities.”14

Meanwhile, Hossain Zillur Rahman,Executive Chairman of Power andParticipation Research Centre (PPRC)indicated that the picture that emerges fromthe use of mobile banking technology is ofpeople’s empowerment. When an earningmember of a family is remotely located, thefamily is likely to experience financial andother insecurities; but with the advent ofmobile money and the ease with whichcapital is transferred thereby, thehelplessness is reduced. The survey, hesaid, reflects aspirations for a better life.

EXISTING RISKS TO THE SECTOR

As is the case in the early-stages oftechnologically-advanced financial serviceor sector’s development, malfeasance isafoot. Unregistered SIM cards are nowbeing widely used to conduct mobilebanking, raising serious concerns regardingillegal transaction of money. It is alsoreported that criminal elements useunregistered mobile SIMs and fake nationalidentity (NID) cards for opening mobilebanking accounts with banks providingmobile money-transfer services. Accordingto law-enforcement agencies, a good numberof such cases have been recently detected.They believe that more than 90% of mobilebanking accounts have been opened withoutproper verification of the subscribers’addresses. Law-enforcement agencies alsoreport that more than 78% of mobile SIMsacross the country are unregistered and these

are being used for money transactionsthrough mobile banking. An official of theSpecial Branch of a police unit said, “Thelaw enforcement agencies are getting morethan 350 complaints a month about illegalmoney transaction through mobile bankingacross the country.”15 He said the criminalsare using unregistered SIMs or fakeaddresses to open the mobile money-transferaccounts. As the criminals are usingunregistered mobile SIMs and fake NIDcards, the law enforcers cannot track themdown.”

The Bangladesh TelecommunicationsRegulatory Commission (BTRC) hasinstructed mobile operators to pursue thematter of vigilance against suchmalfeasance. Mr. Subhankar Saha,Executive Director of Bangladesh Bank,said the central bank is closely monitoringthe situation in context of various cases ofembezzlement and irregularities in themobile-banking sector. He added that thatthe central bank has also asked the mobile-phone operators to control the sale ofunregistered SIMs as a way of reducingillegal mobile money transactions.

Moreover, the central bank has recentlystrengthened its monitoring cell for MFSand penalized a number of MFS providersfor irregularities. The rationale for the bank-led model for MFS in Bangladesh was that itwould minimize settlement risks arisingfrom such transactions. Regulationsregarding mobile banking services transferresponsibility to individual banks toestablish anti-money laundering and anti-terrorism financing tools into their

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 6

presume by now an even higher number ofrickshaw-pullers have availed thesefacilities.”14

Meanwhile, Hossain Zillur Rahman,Executive Chairman of Power andParticipation Research Centre (PPRC)indicated that the picture that emerges fromthe use of mobile banking technology is ofpeople’s empowerment. When an earningmember of a family is remotely located, thefamily is likely to experience financial andother insecurities; but with the advent ofmobile money and the ease with whichcapital is transferred thereby, thehelplessness is reduced. The survey, hesaid, reflects aspirations for a better life.

EXISTING RISKS TO THE SECTOR

As is the case in the early-stages oftechnologically-advanced financial serviceor sector’s development, malfeasance isafoot. Unregistered SIM cards are nowbeing widely used to conduct mobilebanking, raising serious concerns regardingillegal transaction of money. It is alsoreported that criminal elements useunregistered mobile SIMs and fake nationalidentity (NID) cards for opening mobilebanking accounts with banks providingmobile money-transfer services. Accordingto law-enforcement agencies, a good numberof such cases have been recently detected.They believe that more than 90% of mobilebanking accounts have been opened withoutproper verification of the subscribers’addresses. Law-enforcement agencies alsoreport that more than 78% of mobile SIMsacross the country are unregistered and these

are being used for money transactionsthrough mobile banking. An official of theSpecial Branch of a police unit said, “Thelaw enforcement agencies are getting morethan 350 complaints a month about illegalmoney transaction through mobile bankingacross the country.”15 He said the criminalsare using unregistered SIMs or fakeaddresses to open the mobile money-transferaccounts. As the criminals are usingunregistered mobile SIMs and fake NIDcards, the law enforcers cannot track themdown.”

The Bangladesh TelecommunicationsRegulatory Commission (BTRC) hasinstructed mobile operators to pursue thematter of vigilance against suchmalfeasance. Mr. Subhankar Saha,Executive Director of Bangladesh Bank,said the central bank is closely monitoringthe situation in context of various cases ofembezzlement and irregularities in themobile-banking sector. He added that thatthe central bank has also asked the mobile-phone operators to control the sale ofunregistered SIMs as a way of reducingillegal mobile money transactions.

Moreover, the central bank has recentlystrengthened its monitoring cell for MFSand penalized a number of MFS providersfor irregularities. The rationale for the bank-led model for MFS in Bangladesh was that itwould minimize settlement risks arisingfrom such transactions. Regulationsregarding mobile banking services transferresponsibility to individual banks toestablish anti-money laundering and anti-terrorism financing tools into their

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 7

monitoring systems while keeping eye onthe performance of their agents.16

According to the aforementioned MicroSavesurvey, the transfer of money withouthaving a mobile account constitutes 33% ofall transactions in a day. It was revealed thatwhile 22% of the Bangladeshi populationuses mobile money transfer services – only3% actually have personal mobile moneyaccounts. The survey found that agents usetheir personal mobile handsets to conductOTC transactions and that they continue todo transfers using multiple SIM cards andpersonal mobile money accounts, despitebeing aware of the legal transgressionentailed.

The survey report stated that since theprocess of opening personal mobile accountsis relatively exhaustive – requiring copies ofID documents (citizenship certificate,passport, driving license) – it has led tofewer personal accounts. Regarding frauds,it was found that a significant number ofagents have suffered fraudulence andincidences thereof are more frequent in ruralareas than urban areas.17 According to Mr.Abul Kashem Md. Shirin, Deputy ManagingDirector of Dutch-Bangla Bank Ltd., “OTCtransaction through mobile banking is thebiggest concern of money laundering inBangladesh. Some leading mobile bankingservice providers facilitate OTC transactionsand increase the risk of money laundering.”

INTERNATIONAL ACCLAIM

The success of the mobile banking sector inBangladesh has garnered widespreadworldwide attention. Rt Hon CarolineSpelman, a Member of Parliament (MP) forthe Meriden Constituency in the WestMidlands, United Kingdom, lauded thesuccess of mobile banking for garmentworkers in Bangladesh during a debate inthe British Parliament on the eve ofInternational Women's Day 2015. Rt HonSpelman said, “It is good to mention menwho have advocated on behalf of women, solet me mention the well-deserved accoladethat the central banker for Bangladesh, DrAtiur Rahman, received for his initiative toenable mobile phone banking for garmentworkers in Bangladeshi factories. Suchpractical initiatives make a big difference.”18

Her speech also highlighted how theBangladesh Bank has not only created aseparate unit managed by women officialsfor women entrepreneurship developmentbut also directed all banks and financialinstitutions to have similar units.Consequently, thousands of womenentrepreneurs have been facilitated access tofinance.

Moreover, Microsoft’s iconic Bill Gates, ina recent interview with the Wall StreetJournal (WSJ) also recently praised themobile banking services sector inBangladesh. “Rich people take for grantedloans, insurance, banking and other financialservices that poor people have little accessto. Referring to the bKash, the leadingmobile banking service in Bangladesh,Gates pointed out that as a result of the saidcompany, nearly 13 million people inBangladesh are availing of financial

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 7

monitoring systems while keeping eye onthe performance of their agents.16

According to the aforementioned MicroSavesurvey, the transfer of money withouthaving a mobile account constitutes 33% ofall transactions in a day. It was revealed thatwhile 22% of the Bangladeshi populationuses mobile money transfer services – only3% actually have personal mobile moneyaccounts. The survey found that agents usetheir personal mobile handsets to conductOTC transactions and that they continue todo transfers using multiple SIM cards andpersonal mobile money accounts, despitebeing aware of the legal transgressionentailed.

The survey report stated that since theprocess of opening personal mobile accountsis relatively exhaustive – requiring copies ofID documents (citizenship certificate,passport, driving license) – it has led tofewer personal accounts. Regarding frauds,it was found that a significant number ofagents have suffered fraudulence andincidences thereof are more frequent in ruralareas than urban areas.17 According to Mr.Abul Kashem Md. Shirin, Deputy ManagingDirector of Dutch-Bangla Bank Ltd., “OTCtransaction through mobile banking is thebiggest concern of money laundering inBangladesh. Some leading mobile bankingservice providers facilitate OTC transactionsand increase the risk of money laundering.”

INTERNATIONAL ACCLAIM

The success of the mobile banking sector inBangladesh has garnered widespreadworldwide attention. Rt Hon CarolineSpelman, a Member of Parliament (MP) forthe Meriden Constituency in the WestMidlands, United Kingdom, lauded thesuccess of mobile banking for garmentworkers in Bangladesh during a debate inthe British Parliament on the eve ofInternational Women's Day 2015. Rt HonSpelman said, “It is good to mention menwho have advocated on behalf of women, solet me mention the well-deserved accoladethat the central banker for Bangladesh, DrAtiur Rahman, received for his initiative toenable mobile phone banking for garmentworkers in Bangladeshi factories. Suchpractical initiatives make a big difference.”18

Her speech also highlighted how theBangladesh Bank has not only created aseparate unit managed by women officialsfor women entrepreneurship developmentbut also directed all banks and financialinstitutions to have similar units.Consequently, thousands of womenentrepreneurs have been facilitated access tofinance.

Moreover, Microsoft’s iconic Bill Gates, ina recent interview with the Wall StreetJournal (WSJ) also recently praised themobile banking services sector inBangladesh. “Rich people take for grantedloans, insurance, banking and other financialservices that poor people have little accessto. Referring to the bKash, the leadingmobile banking service in Bangladesh,Gates pointed out that as a result of the saidcompany, nearly 13 million people inBangladesh are availing of financial

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 7

monitoring systems while keeping eye onthe performance of their agents.16

According to the aforementioned MicroSavesurvey, the transfer of money withouthaving a mobile account constitutes 33% ofall transactions in a day. It was revealed thatwhile 22% of the Bangladeshi populationuses mobile money transfer services – only3% actually have personal mobile moneyaccounts. The survey found that agents usetheir personal mobile handsets to conductOTC transactions and that they continue todo transfers using multiple SIM cards andpersonal mobile money accounts, despitebeing aware of the legal transgressionentailed.

The survey report stated that since theprocess of opening personal mobile accountsis relatively exhaustive – requiring copies ofID documents (citizenship certificate,passport, driving license) – it has led tofewer personal accounts. Regarding frauds,it was found that a significant number ofagents have suffered fraudulence andincidences thereof are more frequent in ruralareas than urban areas.17 According to Mr.Abul Kashem Md. Shirin, Deputy ManagingDirector of Dutch-Bangla Bank Ltd., “OTCtransaction through mobile banking is thebiggest concern of money laundering inBangladesh. Some leading mobile bankingservice providers facilitate OTC transactionsand increase the risk of money laundering.”

INTERNATIONAL ACCLAIM

The success of the mobile banking sector inBangladesh has garnered widespreadworldwide attention. Rt Hon CarolineSpelman, a Member of Parliament (MP) forthe Meriden Constituency in the WestMidlands, United Kingdom, lauded thesuccess of mobile banking for garmentworkers in Bangladesh during a debate inthe British Parliament on the eve ofInternational Women's Day 2015. Rt HonSpelman said, “It is good to mention menwho have advocated on behalf of women, solet me mention the well-deserved accoladethat the central banker for Bangladesh, DrAtiur Rahman, received for his initiative toenable mobile phone banking for garmentworkers in Bangladeshi factories. Suchpractical initiatives make a big difference.”18

Her speech also highlighted how theBangladesh Bank has not only created aseparate unit managed by women officialsfor women entrepreneurship developmentbut also directed all banks and financialinstitutions to have similar units.Consequently, thousands of womenentrepreneurs have been facilitated access tofinance.

Moreover, Microsoft’s iconic Bill Gates, ina recent interview with the Wall StreetJournal (WSJ) also recently praised themobile banking services sector inBangladesh. “Rich people take for grantedloans, insurance, banking and other financialservices that poor people have little accessto. Referring to the bKash, the leadingmobile banking service in Bangladesh,Gates pointed out that as a result of the saidcompany, nearly 13 million people inBangladesh are availing of financial

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 8

services, transferring money, paying atstores. “Money lenders rule your life,” butlow-cost digital payment systems provide acompelling and secure alternative, Gatessaid. “People will have money problems, butthey should have options.” He termed thehigh rate of cell phones use in Bangladesh asthe “wild adoption of technology,” which isbringing in positive changes to the society.19

He underscored that bKash “exploitedubiquity of cell phones to deliver a neededservice.”

The acknowledgment of the role of theregulator in foster a conducive businessenvironment for MFS culminated with theBangladesh Bank being awarded theAlliance for Financial Inclusion (AFI)Policy Award on September 9, 2014. AFI isthe alliance of regulatory bodies of centralbanks and the financial sector worldwide.The award was given to Bangladesh’scentral bank at the AFI’s conference inTrinidad for its outstanding contribution tothe Mobile Banking policy initiative underits financial inclusion strategy. The AFIconference highlighted the regulator’sextraordinary role in extending bankingcoverage to grassroots people whilerecognizing Bangladesh as a case studyamong South Asian and African countries inregard to financial inclusion and mobilebanking services.20

LOOKING AHEAD

While mobile banking penetration, in termsof the percentage of Bangladesh’spopulation currently using it, is relativelylow – the future appears radiant. According

to a study by Ericsson, the Swedishcommunications technology and servicescompany, about 97 percent of the country’spopulation are interested in using mobilephones to send and receive money in thefuture. The study report by EricssonConsumerLab, entitled “Mobile Commercein Emerging Asia” studied Bangladesh,Indonesia and Vietnam and explored thepossibilities of widespread m-commerceadoption in those emerging countries. 21 Intotal, 6,000 consumers and 900 merchantswere sampled, with the former comprisingmobile phone users aged 15–59 years inurban and sub-rural areas. The researchrevealed that 54 percent of the respondentsin Indonesia have used money transferservices, followed by Vietnam at 45 percentand Bangladesh at 34 percent. When itcomes to interest in and awareness of moneytransfer services using a mobile device,there is great variation across the countries –with Bangladesh leading at 97% responserate in interest in MFS, and 100% in termsof awareness of MFS.

The study also found that urbanization,entailing people moving to cities to findjobs, stimulating the need for quick andreliable money transfers, will be a majordriver for MFS adoption. According toPatrik Hedlund, senior advisor of EricssonConsumerLab “The reason for this is thatwhile some family members move to thecity, others stay in the countryside andremain dependent on those who moved,particularly concerning financial matters.”He added, “In these developing markets,where the incomes are typically low, there is

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 8

services, transferring money, paying atstores. “Money lenders rule your life,” butlow-cost digital payment systems provide acompelling and secure alternative, Gatessaid. “People will have money problems, butthey should have options.” He termed thehigh rate of cell phones use in Bangladesh asthe “wild adoption of technology,” which isbringing in positive changes to the society.19

He underscored that bKash “exploitedubiquity of cell phones to deliver a neededservice.”

The acknowledgment of the role of theregulator in foster a conducive businessenvironment for MFS culminated with theBangladesh Bank being awarded theAlliance for Financial Inclusion (AFI)Policy Award on September 9, 2014. AFI isthe alliance of regulatory bodies of centralbanks and the financial sector worldwide.The award was given to Bangladesh’scentral bank at the AFI’s conference inTrinidad for its outstanding contribution tothe Mobile Banking policy initiative underits financial inclusion strategy. The AFIconference highlighted the regulator’sextraordinary role in extending bankingcoverage to grassroots people whilerecognizing Bangladesh as a case studyamong South Asian and African countries inregard to financial inclusion and mobilebanking services.20

LOOKING AHEAD

While mobile banking penetration, in termsof the percentage of Bangladesh’spopulation currently using it, is relativelylow – the future appears radiant. According

to a study by Ericsson, the Swedishcommunications technology and servicescompany, about 97 percent of the country’spopulation are interested in using mobilephones to send and receive money in thefuture. The study report by EricssonConsumerLab, entitled “Mobile Commercein Emerging Asia” studied Bangladesh,Indonesia and Vietnam and explored thepossibilities of widespread m-commerceadoption in those emerging countries. 21 Intotal, 6,000 consumers and 900 merchantswere sampled, with the former comprisingmobile phone users aged 15–59 years inurban and sub-rural areas. The researchrevealed that 54 percent of the respondentsin Indonesia have used money transferservices, followed by Vietnam at 45 percentand Bangladesh at 34 percent. When itcomes to interest in and awareness of moneytransfer services using a mobile device,there is great variation across the countries –with Bangladesh leading at 97% responserate in interest in MFS, and 100% in termsof awareness of MFS.

The study also found that urbanization,entailing people moving to cities to findjobs, stimulating the need for quick andreliable money transfers, will be a majordriver for MFS adoption. According toPatrik Hedlund, senior advisor of EricssonConsumerLab “The reason for this is thatwhile some family members move to thecity, others stay in the countryside andremain dependent on those who moved,particularly concerning financial matters.”He added, “In these developing markets,where the incomes are typically low, there is

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 8

services, transferring money, paying atstores. “Money lenders rule your life,” butlow-cost digital payment systems provide acompelling and secure alternative, Gatessaid. “People will have money problems, butthey should have options.” He termed thehigh rate of cell phones use in Bangladesh asthe “wild adoption of technology,” which isbringing in positive changes to the society.19

He underscored that bKash “exploitedubiquity of cell phones to deliver a neededservice.”

The acknowledgment of the role of theregulator in foster a conducive businessenvironment for MFS culminated with theBangladesh Bank being awarded theAlliance for Financial Inclusion (AFI)Policy Award on September 9, 2014. AFI isthe alliance of regulatory bodies of centralbanks and the financial sector worldwide.The award was given to Bangladesh’scentral bank at the AFI’s conference inTrinidad for its outstanding contribution tothe Mobile Banking policy initiative underits financial inclusion strategy. The AFIconference highlighted the regulator’sextraordinary role in extending bankingcoverage to grassroots people whilerecognizing Bangladesh as a case studyamong South Asian and African countries inregard to financial inclusion and mobilebanking services.20

LOOKING AHEAD

While mobile banking penetration, in termsof the percentage of Bangladesh’spopulation currently using it, is relativelylow – the future appears radiant. According

to a study by Ericsson, the Swedishcommunications technology and servicescompany, about 97 percent of the country’spopulation are interested in using mobilephones to send and receive money in thefuture. The study report by EricssonConsumerLab, entitled “Mobile Commercein Emerging Asia” studied Bangladesh,Indonesia and Vietnam and explored thepossibilities of widespread m-commerceadoption in those emerging countries. 21 Intotal, 6,000 consumers and 900 merchantswere sampled, with the former comprisingmobile phone users aged 15–59 years inurban and sub-rural areas. The researchrevealed that 54 percent of the respondentsin Indonesia have used money transferservices, followed by Vietnam at 45 percentand Bangladesh at 34 percent. When itcomes to interest in and awareness of moneytransfer services using a mobile device,there is great variation across the countries –with Bangladesh leading at 97% responserate in interest in MFS, and 100% in termsof awareness of MFS.

The study also found that urbanization,entailing people moving to cities to findjobs, stimulating the need for quick andreliable money transfers, will be a majordriver for MFS adoption. According toPatrik Hedlund, senior advisor of EricssonConsumerLab “The reason for this is thatwhile some family members move to thecity, others stay in the countryside andremain dependent on those who moved,particularly concerning financial matters.”He added, “In these developing markets,where the incomes are typically low, there is

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 9

a need to quickly send and receivemoney.”22

According to the findings, 80% of therespondents in Bangladesh save on a regularbasis, compared to 92% in Indonesia and75% in Vietnam. Typically, people keeptheir savings at home – usually in a moneybox, penny bank or a clay pot. In Vietnam,50% of the respondents kept their savings athome, compared to 40% in Bangladesh and35% in India. However, the study also foundthat most people would prefer to save in amore formal way rather than keep savings athome, because of safety concerns. Acrossrespondents, using a mobile device todeposit, withdraw and save money is ofinterest because it is perceived safer thanhandling cash. Also noteworthy is that while37% of consumers in Vietnam are interestedin using mobile payment for service bills,the figure is 57% for Indonesia and 78% forBangladesh. Therefore, for Bangladesh, thesuccess story of mobile banking, thus far,appears to be a tip of a larger iceberg.

In terms of expected changes to currentpatterns of mobile banking usage, the use ofmobile wallets is expected to growsignificantly. To take the case of bKash,while 22% of the population currently usesthe MFS provider’s service, only 3% areregistered wallet users. According to bKashCEO, Mr. Kamal Quadir, “the 3% figure forwallet users is not all that low whencompared to a few other countries. Forexample, in Pakistan where mobile moneystarted four years earlier, 0.4% of thepopulation are wallet-users compared to 7%who use mobile money (based on the same

survey data). Furthermore, 3% ofBangladesh’s population using walletsimplies 5 million people using wallets.Often one member of a family opens anaccount, so if 5 million people use mobilewallets that represents around 5 millionhouseholds. Considering each household hasaround 5 members, 25 million people areimpacted by mobile money.”23

Mr. Quadir adds, “Now, in some cases thereality is that when a rickshaw-puller sendsmoney to his wife in Gaibandha, he goesover to a community-based shopkeeper whohe may know well and trust and asks thatbKash agent to be an intermediary in thattransaction. So the job is getting done. If youand I expect, for the sake of financialinclusion, that the common people will learncomputing skills and gain literacy to push afew mobile buttons to send money across,we need to give them some time. When welook at the adoption trend, we see a gradualchange in behavior with more and morepeople using their own accounts. That’sencouraging.”

This sentiment was echoed by DashguptaAsim Kumar, former executive director ofBangladesh Bank, said, “Now we have 120million mobile SIM-card holders. I am sureall the mobile sets will turn into mobilewallets in the next five years. A big share ofretail banking will be captured by mobilebanking.” He said all payments, includingutility bills, salaries, tuition fees, businessand social safety net programmes, will comeunder mobile banking.24

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 9

a need to quickly send and receivemoney.”22

According to the findings, 80% of therespondents in Bangladesh save on a regularbasis, compared to 92% in Indonesia and75% in Vietnam. Typically, people keeptheir savings at home – usually in a moneybox, penny bank or a clay pot. In Vietnam,50% of the respondents kept their savings athome, compared to 40% in Bangladesh and35% in India. However, the study also foundthat most people would prefer to save in amore formal way rather than keep savings athome, because of safety concerns. Acrossrespondents, using a mobile device todeposit, withdraw and save money is ofinterest because it is perceived safer thanhandling cash. Also noteworthy is that while37% of consumers in Vietnam are interestedin using mobile payment for service bills,the figure is 57% for Indonesia and 78% forBangladesh. Therefore, for Bangladesh, thesuccess story of mobile banking, thus far,appears to be a tip of a larger iceberg.

In terms of expected changes to currentpatterns of mobile banking usage, the use ofmobile wallets is expected to growsignificantly. To take the case of bKash,while 22% of the population currently usesthe MFS provider’s service, only 3% areregistered wallet users. According to bKashCEO, Mr. Kamal Quadir, “the 3% figure forwallet users is not all that low whencompared to a few other countries. Forexample, in Pakistan where mobile moneystarted four years earlier, 0.4% of thepopulation are wallet-users compared to 7%who use mobile money (based on the same

survey data). Furthermore, 3% ofBangladesh’s population using walletsimplies 5 million people using wallets.Often one member of a family opens anaccount, so if 5 million people use mobilewallets that represents around 5 millionhouseholds. Considering each household hasaround 5 members, 25 million people areimpacted by mobile money.”23

Mr. Quadir adds, “Now, in some cases thereality is that when a rickshaw-puller sendsmoney to his wife in Gaibandha, he goesover to a community-based shopkeeper whohe may know well and trust and asks thatbKash agent to be an intermediary in thattransaction. So the job is getting done. If youand I expect, for the sake of financialinclusion, that the common people will learncomputing skills and gain literacy to push afew mobile buttons to send money across,we need to give them some time. When welook at the adoption trend, we see a gradualchange in behavior with more and morepeople using their own accounts. That’sencouraging.”

This sentiment was echoed by DashguptaAsim Kumar, former executive director ofBangladesh Bank, said, “Now we have 120million mobile SIM-card holders. I am sureall the mobile sets will turn into mobilewallets in the next five years. A big share ofretail banking will be captured by mobilebanking.” He said all payments, includingutility bills, salaries, tuition fees, businessand social safety net programmes, will comeunder mobile banking.24

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 9

a need to quickly send and receivemoney.”22

According to the findings, 80% of therespondents in Bangladesh save on a regularbasis, compared to 92% in Indonesia and75% in Vietnam. Typically, people keeptheir savings at home – usually in a moneybox, penny bank or a clay pot. In Vietnam,50% of the respondents kept their savings athome, compared to 40% in Bangladesh and35% in India. However, the study also foundthat most people would prefer to save in amore formal way rather than keep savings athome, because of safety concerns. Acrossrespondents, using a mobile device todeposit, withdraw and save money is ofinterest because it is perceived safer thanhandling cash. Also noteworthy is that while37% of consumers in Vietnam are interestedin using mobile payment for service bills,the figure is 57% for Indonesia and 78% forBangladesh. Therefore, for Bangladesh, thesuccess story of mobile banking, thus far,appears to be a tip of a larger iceberg.

In terms of expected changes to currentpatterns of mobile banking usage, the use ofmobile wallets is expected to growsignificantly. To take the case of bKash,while 22% of the population currently usesthe MFS provider’s service, only 3% areregistered wallet users. According to bKashCEO, Mr. Kamal Quadir, “the 3% figure forwallet users is not all that low whencompared to a few other countries. Forexample, in Pakistan where mobile moneystarted four years earlier, 0.4% of thepopulation are wallet-users compared to 7%who use mobile money (based on the same

survey data). Furthermore, 3% ofBangladesh’s population using walletsimplies 5 million people using wallets.Often one member of a family opens anaccount, so if 5 million people use mobilewallets that represents around 5 millionhouseholds. Considering each household hasaround 5 members, 25 million people areimpacted by mobile money.”23

Mr. Quadir adds, “Now, in some cases thereality is that when a rickshaw-puller sendsmoney to his wife in Gaibandha, he goesover to a community-based shopkeeper whohe may know well and trust and asks thatbKash agent to be an intermediary in thattransaction. So the job is getting done. If youand I expect, for the sake of financialinclusion, that the common people will learncomputing skills and gain literacy to push afew mobile buttons to send money across,we need to give them some time. When welook at the adoption trend, we see a gradualchange in behavior with more and morepeople using their own accounts. That’sencouraging.”

This sentiment was echoed by DashguptaAsim Kumar, former executive director ofBangladesh Bank, said, “Now we have 120million mobile SIM-card holders. I am sureall the mobile sets will turn into mobilewallets in the next five years. A big share ofretail banking will be captured by mobilebanking.” He said all payments, includingutility bills, salaries, tuition fees, businessand social safety net programmes, will comeunder mobile banking.24

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 10

Another avenue for growth is the large andexpanding remittance industry. 25 Annually,domestic remittance constitutes a US$ 64billion market in Bangladesh in addition toUS$ 14 billion of inward internationalremittance inflows. Out of this, the MFSindustry channeled US$ 11 billion in 2013,which is only 14% of the overall remittancemarket. There is considerable opportunity inthe internal remittance alone – and this isexpected to be driven by continuedurbanization and industrialization. To takethe example of ready-made garments(RMG) sector, the primary manufacturingsector in Bangladesh that exports US$ 22billion annually, there are approximately 4million RMG factory workers with aminimum monthly wage of US$ 67. Sincemost of the workers migrate from villagesfor employment, they habitually remitmoney every month to their families invillages. While RMG employers are likelyto rely on MFS increasingly to disbursesalaries - workers are also likely to theninstantly transfer a portion of salaries totheir families without needing to go to anagent.

The Bangladesh government is also likely tobring various social safety net paymentprograms under MFS platforms. This isexpected to help the government cut costsand reduce corruption and malfeasance thatoccur wherein payments are involved.However, there constraints to adoption ofMFS in the social safety net payment

programs, e.g., systemic integration of MFSand alignment of interests of vested parties.But these constraints are expected to beironed out in time. Yet another avenue forgrowth of MFS lies in the use of bankingservices such as loan and deposit products.This is likely to feature more prominently inthe coming years as evidenced by majorplayers already pushing interest bearingproducts.

In terms of numbers, according to analystestimates as well as our own calculations,the number of registered customers is likelyto grow from the present 15 million to 35-40million by 2018. Meanwhile, the totalcustomer transaction value is expected toreach US$ 27-30 billion in 2018.26 What islikely to drive this growth in transactionvalue, other than new users is an increasinglevel of customer activity among MFS users.Existing customers are likely to becomemore comfortable with the technology anduse it more frequently without the help ofagents. Secondly future customers are likelyto adopt the service more easily owing totheir inherently greater technologicalorientation. With more and more MFS usersusing their personal accounts, an expectedstreamlining in the process of openingaccounts, and consequently reducedmalfeasance – even conservative estimatessuggest that it is not long before theBangladesh MFS sector becomes the mostsuccessful case study of mobile bankingadoption and usage in the developing world.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 10

Another avenue for growth is the large andexpanding remittance industry. 25 Annually,domestic remittance constitutes a US$ 64billion market in Bangladesh in addition toUS$ 14 billion of inward internationalremittance inflows. Out of this, the MFSindustry channeled US$ 11 billion in 2013,which is only 14% of the overall remittancemarket. There is considerable opportunity inthe internal remittance alone – and this isexpected to be driven by continuedurbanization and industrialization. To takethe example of ready-made garments(RMG) sector, the primary manufacturingsector in Bangladesh that exports US$ 22billion annually, there are approximately 4million RMG factory workers with aminimum monthly wage of US$ 67. Sincemost of the workers migrate from villagesfor employment, they habitually remitmoney every month to their families invillages. While RMG employers are likelyto rely on MFS increasingly to disbursesalaries - workers are also likely to theninstantly transfer a portion of salaries totheir families without needing to go to anagent.

The Bangladesh government is also likely tobring various social safety net paymentprograms under MFS platforms. This isexpected to help the government cut costsand reduce corruption and malfeasance thatoccur wherein payments are involved.However, there constraints to adoption ofMFS in the social safety net payment

programs, e.g., systemic integration of MFSand alignment of interests of vested parties.But these constraints are expected to beironed out in time. Yet another avenue forgrowth of MFS lies in the use of bankingservices such as loan and deposit products.This is likely to feature more prominently inthe coming years as evidenced by majorplayers already pushing interest bearingproducts.

In terms of numbers, according to analystestimates as well as our own calculations,the number of registered customers is likelyto grow from the present 15 million to 35-40million by 2018. Meanwhile, the totalcustomer transaction value is expected toreach US$ 27-30 billion in 2018.26 What islikely to drive this growth in transactionvalue, other than new users is an increasinglevel of customer activity among MFS users.Existing customers are likely to becomemore comfortable with the technology anduse it more frequently without the help ofagents. Secondly future customers are likelyto adopt the service more easily owing totheir inherently greater technologicalorientation. With more and more MFS usersusing their personal accounts, an expectedstreamlining in the process of openingaccounts, and consequently reducedmalfeasance – even conservative estimatessuggest that it is not long before theBangladesh MFS sector becomes the mostsuccessful case study of mobile bankingadoption and usage in the developing world.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 10

Another avenue for growth is the large andexpanding remittance industry. 25 Annually,domestic remittance constitutes a US$ 64billion market in Bangladesh in addition toUS$ 14 billion of inward internationalremittance inflows. Out of this, the MFSindustry channeled US$ 11 billion in 2013,which is only 14% of the overall remittancemarket. There is considerable opportunity inthe internal remittance alone – and this isexpected to be driven by continuedurbanization and industrialization. To takethe example of ready-made garments(RMG) sector, the primary manufacturingsector in Bangladesh that exports US$ 22billion annually, there are approximately 4million RMG factory workers with aminimum monthly wage of US$ 67. Sincemost of the workers migrate from villagesfor employment, they habitually remitmoney every month to their families invillages. While RMG employers are likelyto rely on MFS increasingly to disbursesalaries - workers are also likely to theninstantly transfer a portion of salaries totheir families without needing to go to anagent.

The Bangladesh government is also likely tobring various social safety net paymentprograms under MFS platforms. This isexpected to help the government cut costsand reduce corruption and malfeasance thatoccur wherein payments are involved.However, there constraints to adoption ofMFS in the social safety net payment

programs, e.g., systemic integration of MFSand alignment of interests of vested parties.But these constraints are expected to beironed out in time. Yet another avenue forgrowth of MFS lies in the use of bankingservices such as loan and deposit products.This is likely to feature more prominently inthe coming years as evidenced by majorplayers already pushing interest bearingproducts.

In terms of numbers, according to analystestimates as well as our own calculations,the number of registered customers is likelyto grow from the present 15 million to 35-40million by 2018. Meanwhile, the totalcustomer transaction value is expected toreach US$ 27-30 billion in 2018.26 What islikely to drive this growth in transactionvalue, other than new users is an increasinglevel of customer activity among MFS users.Existing customers are likely to becomemore comfortable with the technology anduse it more frequently without the help ofagents. Secondly future customers are likelyto adopt the service more easily owing totheir inherently greater technologicalorientation. With more and more MFS usersusing their personal accounts, an expectedstreamlining in the process of openingaccounts, and consequently reducedmalfeasance – even conservative estimatessuggest that it is not long before theBangladesh MFS sector becomes the mostsuccessful case study of mobile bankingadoption and usage in the developing world.

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 11

Graph 1: Average Daily Transaction through Mobile Financial Services

Source: Bangladesh Bank

Graph 2: No. of Registered Clients

Source: Bangladesh Bank

0

50

100

150

200

250

300

350

400

Jan,2014

Feb,2014

Mar,2014

Apr,2014

May,2014

BD

T in

Cro

re

0

50

100

150

200

250

300

Jan,2014

Feb,2014

Mar,2014

Apr,2014

May,2014

BD

T in

Lac

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 11

Graph 1: Average Daily Transaction through Mobile Financial Services

Source: Bangladesh Bank

Graph 2: No. of Registered Clients

Source: Bangladesh Bank

May,2014

Jun,2014

Jul,2014

Aug,2014

Sep,2014

Oct,2014

Nov,2014

Dec,2014

Jan,2015

May,2014

Jun,2014

Jul,2014

Aug,2014

Sep,2014

Oct,2014

Nov,2014

Dec,2014

Jan,2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 11

Graph 1: Average Daily Transaction through Mobile Financial Services

Source: Bangladesh Bank

Graph 2: No. of Registered Clients

Source: Bangladesh Bank

Feb,2015

Jan,2015

Feb,2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 12

Graph 3: Salary Disbursement (B2P)

Source: Bangladesh Bank

Graph 4: Utility Bill Payment (P2B)

Source: Bangladesh Bank

0

10

20

30

40

50

60

70

80

90

Jan,2014

Feb,2014

Mar,2014

Apr,2014

May,2014

BD

T in

Cro

re

24.2

58.15

72.79

114.13

127.72

0

20

40

60

80

100

120

140

160

180

Jan,2014

Feb,2014

Mar,2014

Apr,2014

May,2014

BD

T in

Cro

re

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 12

Graph 3: Salary Disbursement (B2P)

Source: Bangladesh Bank

Graph 4: Utility Bill Payment (P2B)

Source: Bangladesh Bank

May,2014

Jun,2014

Jul,2014

Aug,2014

Sep,2014

Oct,2014

Nov,2014

Dec,2014

Jan,2015

127.72 131.12138.03

106.32

158.82

105.6

55.2650.08

59.79

May,2014

Jun,2014

Jul,2014

Aug,2014

Sep,2014

Oct,2014

Nov,2014

Dec,2014

Jan,2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 12

Graph 3: Salary Disbursement (B2P)

Source: Bangladesh Bank

Graph 4: Utility Bill Payment (P2B)

Source: Bangladesh Bank

Jan,2015

Feb,2015

59.79

81.73

Jan,2015

Feb,2015

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 13

REFERENCES

Alam, Md. Zahangir, Patwary, MonzurMorshed, and Rahim, MuhammadAbdur, (2013) “Mobile Banking: TheBangladesh Experience,” Journal ofMarketing and Consumer Research - AnOpen Access International Journal,Vol.1

Bhuiyan, Md. Saifur Rahman andRahman, Md. Mizanur, (Sept–Oct 2013)“Implementation of Mobile Banking inBangladesh: Opportunities andChallenges,” IOSR Journal ofElectronics and CommunicationEngineering (IOSR-JECE), Volume 7,Issue 5, pp. 53-58

Dona, Priyanka Das, Mouri, SharminIslam, Hasan, Md. and Abedin, Md.Zainal, (2014) “Significance ofExponential uses of Mobile FinancialServices (MFS) in Bangladesh,” GlobalJournal of Management and BusinessResearch: Finance, Vol. 14, Issue 4,Version 1.0

Hassan, Mohammad Masudul, Rahman,Airin, Afrin, Sharmin, and Rabbany,Md. Gulam, (2014) “Factors Influencingthe Adoption of Mobile BankingServices in Bangladesh: An EmpiricalAnalysis,” International ResearchJournal of Marketing, Vol. 2, No. 1, pp.9-20

Islam, Mohammad Majedul andHossain, Md. Enayet, “Consumers’Attitudes towards Mobile Banking inBangladesh,” Research Paper,University of Rajshahi. Available onlineat: http://sdiwc.net/digital-library/web-admin/upload-pdf/00000934.pdf

Islam, Md. Shahanur, (2013), “MobileBanking: An Emerging Issue inBangladesh,” ASA University Review,Vol. 7 No. 1, Jan–June, 2013

Johara, Fatema Tuj, (Aug 2014)“Consumer's Pattern and Behaviortoward the Usage of Mobile Banking,”International Journal of AcademicResearch in Business and SocialSciences, Vol. 4, No. 8

Kabir, Rakibul, (July 2013) “FactorsInfluencing the Usage of MobileBanking: Incident from a DevelopingCountry,” World Review of BusinessResearch, Vol. 3, No. 3, pp. 96–114

Parvin, Afroza, (April 2013), “MobileBanking Operation in Bangladesh:Prediction of Future,” Journal of InternetBanking and Commerce, April 2013,Vol. 18, No.1

Sagib, G.K. and Zapan, B. (2014),“Bangladeshi mobile banking servicequality and customer satisfaction andloyalty”, Management & Marketing.Challenges for the Knowledge Society,Vol. 9, No. 3, pp. 331‐346.

Siddik, Md. NurAlam, Sun, Gang,Yanjuan, CUI, and Kabiraj, Sajal, (2014)“Financial Inclusion through MobileBanking: A Case of Bangladesh,”Journal of Applied Finance & Banking,Vol. 4, No. 6, pp. 109-136

Siddiquie, Mr. Razib, (Jul-Aug 2014)“Scopes and threats of Mobile Financialservices in Bangladesh,” IOSR Journalof Economics and Finance (IOSR-JEF),Vol. 4, Issue 4, pp. 36-39

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 13

REFERENCES

Alam, Md. Zahangir, Patwary, MonzurMorshed, and Rahim, MuhammadAbdur, (2013) “Mobile Banking: TheBangladesh Experience,” Journal ofMarketing and Consumer Research - AnOpen Access International Journal,Vol.1

Bhuiyan, Md. Saifur Rahman andRahman, Md. Mizanur, (Sept–Oct 2013)“Implementation of Mobile Banking inBangladesh: Opportunities andChallenges,” IOSR Journal ofElectronics and CommunicationEngineering (IOSR-JECE), Volume 7,Issue 5, pp. 53-58

Dona, Priyanka Das, Mouri, SharminIslam, Hasan, Md. and Abedin, Md.Zainal, (2014) “Significance ofExponential uses of Mobile FinancialServices (MFS) in Bangladesh,” GlobalJournal of Management and BusinessResearch: Finance, Vol. 14, Issue 4,Version 1.0

Hassan, Mohammad Masudul, Rahman,Airin, Afrin, Sharmin, and Rabbany,Md. Gulam, (2014) “Factors Influencingthe Adoption of Mobile BankingServices in Bangladesh: An EmpiricalAnalysis,” International ResearchJournal of Marketing, Vol. 2, No. 1, pp.9-20

Islam, Mohammad Majedul andHossain, Md. Enayet, “Consumers’Attitudes towards Mobile Banking inBangladesh,” Research Paper,University of Rajshahi. Available onlineat: http://sdiwc.net/digital-library/web-admin/upload-pdf/00000934.pdf

Islam, Md. Shahanur, (2013), “MobileBanking: An Emerging Issue inBangladesh,” ASA University Review,Vol. 7 No. 1, Jan–June, 2013

Johara, Fatema Tuj, (Aug 2014)“Consumer's Pattern and Behaviortoward the Usage of Mobile Banking,”International Journal of AcademicResearch in Business and SocialSciences, Vol. 4, No. 8

Kabir, Rakibul, (July 2013) “FactorsInfluencing the Usage of MobileBanking: Incident from a DevelopingCountry,” World Review of BusinessResearch, Vol. 3, No. 3, pp. 96–114

Parvin, Afroza, (April 2013), “MobileBanking Operation in Bangladesh:Prediction of Future,” Journal of InternetBanking and Commerce, April 2013,Vol. 18, No.1

Sagib, G.K. and Zapan, B. (2014),“Bangladeshi mobile banking servicequality and customer satisfaction andloyalty”, Management & Marketing.Challenges for the Knowledge Society,Vol. 9, No. 3, pp. 331‐346.

Siddik, Md. NurAlam, Sun, Gang,Yanjuan, CUI, and Kabiraj, Sajal, (2014)“Financial Inclusion through MobileBanking: A Case of Bangladesh,”Journal of Applied Finance & Banking,Vol. 4, No. 6, pp. 109-136

Siddiquie, Mr. Razib, (Jul-Aug 2014)“Scopes and threats of Mobile Financialservices in Bangladesh,” IOSR Journalof Economics and Finance (IOSR-JEF),Vol. 4, Issue 4, pp. 36-39

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 13

REFERENCES

Alam, Md. Zahangir, Patwary, MonzurMorshed, and Rahim, MuhammadAbdur, (2013) “Mobile Banking: TheBangladesh Experience,” Journal ofMarketing and Consumer Research - AnOpen Access International Journal,Vol.1

Bhuiyan, Md. Saifur Rahman andRahman, Md. Mizanur, (Sept–Oct 2013)“Implementation of Mobile Banking inBangladesh: Opportunities andChallenges,” IOSR Journal ofElectronics and CommunicationEngineering (IOSR-JECE), Volume 7,Issue 5, pp. 53-58

Dona, Priyanka Das, Mouri, SharminIslam, Hasan, Md. and Abedin, Md.Zainal, (2014) “Significance ofExponential uses of Mobile FinancialServices (MFS) in Bangladesh,” GlobalJournal of Management and BusinessResearch: Finance, Vol. 14, Issue 4,Version 1.0

Hassan, Mohammad Masudul, Rahman,Airin, Afrin, Sharmin, and Rabbany,Md. Gulam, (2014) “Factors Influencingthe Adoption of Mobile BankingServices in Bangladesh: An EmpiricalAnalysis,” International ResearchJournal of Marketing, Vol. 2, No. 1, pp.9-20

Islam, Mohammad Majedul andHossain, Md. Enayet, “Consumers’Attitudes towards Mobile Banking inBangladesh,” Research Paper,University of Rajshahi. Available onlineat: http://sdiwc.net/digital-library/web-admin/upload-pdf/00000934.pdf

Islam, Md. Shahanur, (2013), “MobileBanking: An Emerging Issue inBangladesh,” ASA University Review,Vol. 7 No. 1, Jan–June, 2013

Johara, Fatema Tuj, (Aug 2014)“Consumer's Pattern and Behaviortoward the Usage of Mobile Banking,”International Journal of AcademicResearch in Business and SocialSciences, Vol. 4, No. 8

Kabir, Rakibul, (July 2013) “FactorsInfluencing the Usage of MobileBanking: Incident from a DevelopingCountry,” World Review of BusinessResearch, Vol. 3, No. 3, pp. 96–114

Parvin, Afroza, (April 2013), “MobileBanking Operation in Bangladesh:Prediction of Future,” Journal of InternetBanking and Commerce, April 2013,Vol. 18, No.1

Sagib, G.K. and Zapan, B. (2014),“Bangladeshi mobile banking servicequality and customer satisfaction andloyalty”, Management & Marketing.Challenges for the Knowledge Society,Vol. 9, No. 3, pp. 331‐346.

Siddik, Md. NurAlam, Sun, Gang,Yanjuan, CUI, and Kabiraj, Sajal, (2014)“Financial Inclusion through MobileBanking: A Case of Bangladesh,”Journal of Applied Finance & Banking,Vol. 4, No. 6, pp. 109-136

Siddiquie, Mr. Razib, (Jul-Aug 2014)“Scopes and threats of Mobile Financialservices in Bangladesh,” IOSR Journalof Economics and Finance (IOSR-JEF),Vol. 4, Issue 4, pp. 36-39

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 14

1 For details, see the news report “Mobile bankingtakes financial services to unbanked population”available at: http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php2 Primary data collected by CES faculty3 See at http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php4 For details on money transfer limits as well as therecord levels of MFS activity in March 2015, seehttp://www.dhakatribune.com/business/2015/apr/29/mobile-transactions-reach-tk400-crore-day5 For a discussion on the World Bank survey, seehttp://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php6 Primary data collected by CES faculty7 For details on the MicroSave study, seehttp://www.thedailystar.net/most-mobile-payment-agents-profitable-study-497158http://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks9http://www.thedailystar.net/most-mobile-payment-agents-profitable-study-4971510 Ibid.11 See http://www.thefinancialexpress-bd.com/2014/10/04/5962412 Results of the survey of rickshaw pullers availableat: http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by13 For details on remittance patterns, seehttp://www.thedailystar.net/mobile-banking-and-inward-remittance-5424114 See http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by15 For details on forgery-related risks, seehttp://www.thefinancialexpress-bd.com/2015/02/10/80451/index.php16 See http://www.thedailystar.net/mobile-cash-grows-on-rural-customers-6108417 Seehttp://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks18 See http://www.thefinancialexpress-bd.com/2015/03/08/84052/index.php19 For details on Bill Gates’ remarks, seehttp://en.prothom-alo.com/economy/news/54809/Bill-Gates-lauds-BD-s-mobile-banking20 News report on the AFI Policy Award forBangladesh Bank: http://en.prothom-alo.com/economy/news/53378/BB-receives-AFI-Policy-Award-for-mobile-banking

21 For details on the Ericsson study, seehttp://www.thedailystar.net/ericsson-study-sees-bright-future-for-mobile-banking-3852222 Ibid.23 For the entire interview with bKash CEO, Mr.Kamal Quadir, seehttp://www.dhakatribune.com/long-form/2015/jan/16/%E2%80%98-common-people-will-have-opportunity-participate-local-and-global-value-chain24 Ibid.25 For discussion on remittance prospects, seehttp://www.thefinancialexpress-bd.com/2014/10/04/59624 andhttp://www.thefinancialexpress-bd.com/2015/03/03/83403/index.php26 These estimates are based projections by leadingequity research analysts and CES researchers

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 14

1 For details, see the news report “Mobile bankingtakes financial services to unbanked population”available at: http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php2 Primary data collected by CES faculty3 See at http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php4 For details on money transfer limits as well as therecord levels of MFS activity in March 2015, seehttp://www.dhakatribune.com/business/2015/apr/29/mobile-transactions-reach-tk400-crore-day5 For a discussion on the World Bank survey, seehttp://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php6 Primary data collected by CES faculty7 For details on the MicroSave study, seehttp://www.thedailystar.net/most-mobile-payment-agents-profitable-study-497158http://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks9http://www.thedailystar.net/most-mobile-payment-agents-profitable-study-4971510 Ibid.11 See http://www.thefinancialexpress-bd.com/2014/10/04/5962412 Results of the survey of rickshaw pullers availableat: http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by13 For details on remittance patterns, seehttp://www.thedailystar.net/mobile-banking-and-inward-remittance-5424114 See http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by15 For details on forgery-related risks, seehttp://www.thefinancialexpress-bd.com/2015/02/10/80451/index.php16 See http://www.thedailystar.net/mobile-cash-grows-on-rural-customers-6108417 Seehttp://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks18 See http://www.thefinancialexpress-bd.com/2015/03/08/84052/index.php19 For details on Bill Gates’ remarks, seehttp://en.prothom-alo.com/economy/news/54809/Bill-Gates-lauds-BD-s-mobile-banking20 News report on the AFI Policy Award forBangladesh Bank: http://en.prothom-alo.com/economy/news/53378/BB-receives-AFI-Policy-Award-for-mobile-banking

21 For details on the Ericsson study, seehttp://www.thedailystar.net/ericsson-study-sees-bright-future-for-mobile-banking-3852222 Ibid.23 For the entire interview with bKash CEO, Mr.Kamal Quadir, seehttp://www.dhakatribune.com/long-form/2015/jan/16/%E2%80%98-common-people-will-have-opportunity-participate-local-and-global-value-chain24 Ibid.25 For discussion on remittance prospects, seehttp://www.thefinancialexpress-bd.com/2014/10/04/59624 andhttp://www.thefinancialexpress-bd.com/2015/03/03/83403/index.php26 These estimates are based projections by leadingequity research analysts and CES researchers

Center for Enterprise and Society,University of Liberal Arts BangladeshHouse 56, Road 4/A, Dhanmondi, Dhaka – 1209Telephone: 9661301, 9661255, Fax: 9670931,

Email:ces@ulab.edu.bd

Website: http://www.ulab.edu.bd/CES/home/

Blog: http://ces-ulab.blogspot.com/

Page | 14

1 For details, see the news report “Mobile bankingtakes financial services to unbanked population”available at: http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php2 Primary data collected by CES faculty3 See at http://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php4 For details on money transfer limits as well as therecord levels of MFS activity in March 2015, seehttp://www.dhakatribune.com/business/2015/apr/29/mobile-transactions-reach-tk400-crore-day5 For a discussion on the World Bank survey, seehttp://www.thefinancialexpress-bd.com/2014/08/19/51183/index.php6 Primary data collected by CES faculty7 For details on the MicroSave study, seehttp://www.thedailystar.net/most-mobile-payment-agents-profitable-study-497158http://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks9http://www.thedailystar.net/most-mobile-payment-agents-profitable-study-4971510 Ibid.11 See http://www.thefinancialexpress-bd.com/2014/10/04/5962412 Results of the survey of rickshaw pullers availableat: http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by13 For details on remittance patterns, seehttp://www.thedailystar.net/mobile-banking-and-inward-remittance-5424114 See http://en.prothom-alo.com/economy/news/56436/76%25-of-Dhaka-s-rickshaw-pullers-send-home-money-by15 For details on forgery-related risks, seehttp://www.thefinancialexpress-bd.com/2015/02/10/80451/index.php16 See http://www.thedailystar.net/mobile-cash-grows-on-rural-customers-6108417 Seehttp://www.dhakatribune.com/business/2014/nov/11/mfs-raises-money-laundering-risks18 See http://www.thefinancialexpress-bd.com/2015/03/08/84052/index.php19 For details on Bill Gates’ remarks, seehttp://en.prothom-alo.com/economy/news/54809/Bill-Gates-lauds-BD-s-mobile-banking20 News report on the AFI Policy Award forBangladesh Bank: http://en.prothom-alo.com/economy/news/53378/BB-receives-AFI-Policy-Award-for-mobile-banking

21 For details on the Ericsson study, seehttp://www.thedailystar.net/ericsson-study-sees-bright-future-for-mobile-banking-3852222 Ibid.23 For the entire interview with bKash CEO, Mr.Kamal Quadir, seehttp://www.dhakatribune.com/long-form/2015/jan/16/%E2%80%98-common-people-will-have-opportunity-participate-local-and-global-value-chain24 Ibid.25 For discussion on remittance prospects, seehttp://www.thefinancialexpress-bd.com/2014/10/04/59624 andhttp://www.thefinancialexpress-bd.com/2015/03/03/83403/index.php26 These estimates are based projections by leadingequity research analysts and CES researchers