Agent banking shows signs of promise

Uzzala Rani Sarkar had never thought of stepping into a branch of a bank and owning an account. But thanks to an agent banking outlet set up by Bank Asia at Bhobanipur Bazar in Sirajdikhan under Munshiganj district, she now has one.

Her husband, a farm labourer, earns a low wage. Despite the financial constraint, the 35-year-old housewife opened the account depositing Tk 500 every month, considering the future of her two school-going children. The agent banking booth is located in front of her house and the housewife credited the proximity for prompting her to open the account.

Uzzala said: “It is very easy for me to get access to the agent banking outlet as people who work there are known to me.”

“Moreover, I don't need to take transport to deposit money,” she told The Daily Star in an interview yesterday. She has been saving money with the bank for the last two years. Uzzala's two more family members—her brother-in-law and wife—have opened savings account after Bank Asia set up the centre on January 17, 2014.

This is the first agent banking point of the private commercial bank as it embarked on bringing unbanked people in the remote areas under the formal banking network.

Bank Asia yesterday celebrated the day as 'Agent Banking Day of Bank Asia' through a programme in the area along with the agents, bankers and clients.

Humaira Azam, deputy managing director of Bank Asia; Sarder Akhter Hamed, head of micro, small and medium enterprise, and Ahsan Ul Alam, head of the agent banking division, attended the gathering.

Muhammad Islam Sheikh, the first agent of Bank Asia who took up the challenge to start the new business, talked about his success.

Sheikh said he was looking for an opportunity to begin a suitable business and received an offer from the bank to open the outlet although he knew nothing about the concept.

Now the deposit of the outlet stands at Tk 4.15 crore furnished by 2,000 accountholders.

In fact, agent banking is increasingly getting popular across Bangladesh. 

The number of total agent outlets stood at 1,272 as of September last year, according to central bank data.

The number of accountholders under the agent banking network reached 237,278 who deposited Tk 185.49 crore during the same period.

Bank Asia disbursed Tk 75.25 crore through its agent banking channel as of September, creating many new micro entrepreneurs in the far-flung areas.

Rina Vadra, a micro entrepreneur involved in the cottage industry, expanded her business by taking loans from the outlet.

She borrowed Tk 6 lakh in phases in the last three years and has been paying instalment regularly.

“I took the loan for the first time from the agent banking booth to expand my business. Several workers are now employed in my business and the easy financial access has made it possible.”

Agent banking has also eliminated the hassles people had to go through to withdraw remittance as the new system has brought the banking service at the doorsteps of the beneficiaries.

Sayera Begum opened an account with the same outlet as it has brought great convenience for her.

Before opening the account, the 50-year-old had to travel eight kilometres from her home to a bank located in Sirajdikhan Bazar to collect the money sent by her husband from Saudi Arabia.

“I switched to Bank Asia by opening an account through the agent banking outlet,” said Begum.

The central bank issued the agent banking guideline in 2013 but the licensees started full-fledged operations in 2016.

Agent banking offers limited banking and financial services to the underserved population by engaging representatives under a valid agency agreement.

It is the owner of an outlet who conducts banking transactions on behalf of a bank.

Agents provide services such as cash deposits, withdrawals, remittance disbursement, small value loan disbursement and recovery of loans as well as cash payments under the government's social safety net programmes.

Thirteen banks are running agent banking services: Dutch-Bangla, Bank Asia, Al-Arafah Islami, Social Islami, Modhumoti, Mutual Trust, NRB Commercial, Standard, Agrani, Midland, The City, Islami Bank Bangladesh and First Security Islami Bank.

Deposit collection rose 42 percent year-on-year to Tk 922 crore in the July-September quarter and the number of agent banking accounts stood at 10.38 lakh as of September, according to central bank data.