Empowering the unbanked

Sustainable development has become a global imperative, with financial institutions worldwide integrating sustainability into their core policies. Financial inclusion and literacy are recognised as crucial components of sustainable finance. Despite the Bangladesh’s progress in human development, a significant portion of the population remains excluded from formal financial services, primarily due to a lack of financial literacy. To address this, Bangladesh Bank has mandated that banks and non-bank financial institutions actively work towards bringing the unbanked population into the financial fold. This article will explore the state of financial inclusion and literacy initiatives undertaken by these institutions in Bangladesh.
Financial Inclusion
Bangladesh Bank has been at the forefront of efforts to extend formal banking services to underprivileged populations across urban and rural areas. A key strategy has been the introduction of No Frill Accounts (NFAs), which are designed to provide basic banking services to those typically excluded from the financial system. These accounts require minimal documentation and offer low or no fees, making them accessible to marginalized groups.
NFAs have been opened for various segments, including farmers, school children, and street children, under the guidance of Bangladesh Bank. Additionally, banks have extended these accounts to physically challenged individuals, leather workers, small footwear workers, and readymade garments workers.
BRAC Bank, a leader in this initiative, has been particularly focused on integrating small entrepreneurs, such as farmers, shopkeepers, and cottage industry workers, into the mainstream banking system. Md. Sabbir Hossain, Deputy Managing Director and Chief Sustainability Officer at BRAC Bank, highlights their efforts: “We have been opening No-Frill Accounts regularly for marginalized communities with minimal documentation and low to no cost.”
Another significant step towards financial inclusion has been the introduction of agent banking. Since geographically remote populations often lack access to traditional banking services, agent banking was launched in 2014 following recommendations from Bangladesh Bank. Bank Asia was the pioneer in this initiative, becoming the first scheduled bank to offer agent banking services. Muhammad Mynul Hossain FVP, CRM at Bank Asia explains, “Our agent banking services reach even the most remote and underserved areas, including domestic workers, ensuring that no one is left out of the financial system.”
While some banks, like Dhaka Bank, are yet to implement agent banking, they have compensated by establishing small sub-branches in geographically remote areas. These sub-branches are designed to serve marginalized populations, such as poor peasants, agricultural workers, and dairy farmers. Fakrul Abedin Milon, Head of CRM and SFU at Dhaka Bank, notes, “We focus on underserved populations through our sub-branches, and we also partner with NGOs to facilitate initiatives like NFAs.”
Financial Education
Financial inclusion and financial literacy are closely intertwined. Bangladesh Bank has recognised this and has made significant strides in promoting financial literacy across the country. Initially, Bangladesh Bank launched a comprehensive web portal featuring TV and radio commercials, videos, texts, and games tailored to the needs of the poor.
To ensure the widespread impact of financial literacy, Bangladesh Bank directed all banks and non-bank financial institutions to undertake specific measures. BRAC Bank has been a pioneer in this area, launching numerous financial literacy and education programs. Md. Sabbir Hossain explains their approach: “We regularly arrange programs, trade fairs, training sessions, and digital education initiatives. Our agent banking also conducts customer engagement workshops focused on financial education. Additionally, our ‘Uddokta 101’ entrepreneurship accelerator program has graduated 130 women entrepreneurs since 2021.”
United Finance has also been active in promoting financial literacy, with Sudip Saha, Head of SME, emphasizing their commitment: “We hold regular financial literacy programs at our regional and geographically distant branches.”
Similarly, Syed Mahbubur Rahman, Managing Director and CEO of MTB, underscores the importance of targeting rural Bangladesh and its most marginalised populations. “Our financial literacy program prioritises rural areas and marginalized groups, particularly women. We conduct group consultations with dairy farmers and women entrepreneurs to ensure they are financially empowered.”
Through initiatives like NFAs, agent banking, and comprehensive financial education programs, Bangladesh Bank, along with banks and non-bank financial institutions, is making significant strides in bringing the unbanked population into the formal financial system. While challenges remain, the concerted efforts of these institutions are paving the way for a more inclusive and financially literate society, ensuring that every citizen can participate in and benefit from economic growth.