PRACTICALITIES OF AGENT BANKING FOR FINANCIAL INCLUSION IN RURAL AREAS OF BANGLADESH
Keywords:
Agent Banking, Rural Financial Inclusion, Agent, Outlets, Correlation.
Abstract
Agent banking is an indispensable part of the inclusive banking system for advancing greater financial inclusion in Bangladesh. These services represent the new extension of branch banking, offering formal banking services in rural regions at a low cost via agents and outlets. The purpose of this study is to examine the agent banking practical uses to meet the financial services needs of the rural population in Bangladesh. Moreover, this study investigates the relation between agent banking presence in rural areas and its uses. Five years of secondary data regarding agent banking have been collected from the statistics department of Bangladesh Bank and presented in tabular form. Besides, to portrait the real picture of practical uses of agent banking, a rural user’s case study has been used in this study. Descriptive with an analytical approach has also been used to analyze the data. Besides, correlation analysis has also been used to measure the relation between agents, outlets, and rural practices. This study found that agent banking services are practically used in rural areas for deposit collection, loan disbursements, remittance services, and utility bill payment. Moreover, it has discovered a favorable relationship between agent banking presence and useful applications in rural areas. The practical applications of the agent banking have advanced significantly in rural areas and included those who were previously denied access to these financial services. While the number of agents and outlets are not sufficient, total rural account holders in agent banking remain low compared to the rural adult population.
JEL Classification Codes: G21, G51, G53, C87.
References
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Ayegbeni, U. D. (2020). Agent banking and financial inclusion in Nigeria: Challenges and prospects. International Journal of Banking and Finance Research, 6(1), 32-42. Retrieved from https://www.iiardjournals.org/get/IJBFR/VOL.%206%20NO.%201%202020/Agent%20Banking%20and%20Financial.pdf
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Cámara, N., Tuesta, D., & Urbiola, P. (2015). Extendiendo el acceso al sistema financiero formal: el modelo de negocio de los corresponsales bancarios [Extending access to the formal financial system: the business model of bank correspondents]. Documento de Trabajo n 15, 11(4), 1-25. Retrieved from https://www.bbvaresearch.com/wp-content/uploads/2015/04/DT15-11_Corresponsales1.pdf
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Hossain, M. I., Al-Amin, M., & Toha, M. A. (2021). Are Commercial Agent Banking Services Worthwhile For Financial Inclusion? Business Management and Strategy, 12(2), 206–227. https://doi.org/10.5296/bms.v12i2.19070
Khan, S. N., & Khan, T. (2014). Agent banking, the revolution in financial service sector of Bangladesh. IOSR Journal of Economics and Finance, 5(1), 28–32. https://doi.org/10.9790/5933- 0512832
Khanam, U. S. (2022). Agent Banking: an agent of financial inclusion in Bangladesh. Global Journal of Management and Business Research, 22(B6), 81–92. https://doi.org/10.34257/GJMBRBVOL22IS6PG81
Mahmood, R., & Sarker, S. (2015). Inclusive growth through branchless banking: A review of agent banking and its impact. Journal of Economics and Sustainable Development, 6(23), 86-93. Retrieved from https://www.iiste.org/Journals/index.php/JEDS/article/view/27624
Ndungu, C. G., & Njeru, A. (2014). Assessment of factors influencing adoption of agency banking in Kenya: The case of Kajiado north sub county. International journal of business and commerce, 3(8), 91-111. Retrieved from https://tinyurl.com/a2j765
Nisha, N., Nawrin, K., & Bushra, A. (2020). Agent Banking and Financial Inclusion. International Journal of Asian Business and Information Management, 11(1), 127–141. https://doi.org/10.4018/ijabim.2020010108
Ogbebor, T. O. (2015). Enhancing financial inclusion in Nigeria through agent banking: Prospects, benefits and challenges. LAPO microfinance bank archive. Retrieved from https://tinyurl.com/tt76edp
Pervin, T., & Sarker, B. K. (2021). The Evolution and Prospect of Agent Banking in Bangladesh : A Study Based on Bangladesh Banking Sectors. Journal of Business Management and Economic Research, 5(4), 121–134. Retrieved from https://www.jobmer.org/2021/jobmer_vol5_issue4_article2_full_text.pdf
Rahman, B. (2016). The impact of agency banking to the development of SME sector: The case of Bangladesh. World Journal of Social Sciences, 6(3), 59-75. Retrieved from https://tinyurl.com/t5r687y
Rahman, M. M. (2019). Prospect and challenges of agent banking on financial inclusion in Bangladesh. Amity Global Business Review, 18-26. Retrieved from https://tinyurl.com/t54e6re
Santu, T. V. C., Mawanza, W., & Muredzi, V. (2017). An Evaluation of the Agency Banking Model Adopted by Zimbabwean Commercial Banks. Journal of Finance and Bank Management, 5(2), 58–66. https://doi.org/10.15640/jfbm.v5n2a6
Siddiquie, M. R. (2014). Agent banking, the revolution in financial service sector of Bangladesh. IOSR Journal of Economics and Finance, 5(1), 28-32. Retrieved from https://www.iosrjournals.org/iosr-jef/papers/vol5-issue1/D0512832.pdf
Sohrab, T., Idris, F., & Sulaiman, N. (2023). The relationship between financial inclusion and women’s empowerment in rural Bangladesh: The moderating effect of agent banking. Environment Social Psychology, 9(1). https://doi.org/10.54517/esp.v9i1.1955
Uddin, M. J. (2020). How the agent-based banking model might facilitate financial inclusion and sustainability in Emerging Markets and Developing Economies (EMDEs) via economic circularity? European Journal of Social Impact and Circular Economy, 1(2). https://doi.org/10.13135/2704-9906/4945
Uddin, M. M., & Sultana, A. (2019). Factors shaping the prospects of agent banking in Bangladesh. Journal of Business Studies, XL(2), 19-34. Retrieved from https://www.fbs-du.com/news_event/2715977305892.%20Md.%20Main%20Uddin%20&%20Afrin%20Sultana.pdf
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Wairi, D. K. (2011). Factors Influencing the Adoption of Agent Banking Innovation among Commercial Banks in Kenya. MBA Research Project, University of Nairobi, Kenya. Retrieved from https://tinyurl.com/t56r7edy
Afande, F. O., & Mbugua, S. W. (2015). Role of agent banking services in promotion of financial inclusion in Nyeri Town Kenya. Research Journal of finance and accounting, 6(3), 148-169. Retrieved from https://iiste.org/Journals/index.php/RJFA/article/view/19956/20484
Afzal, M. H. B. (2016). Sustainable Development of Rural Communities in Bangladesh by Integrating Mobile Internet and Agent Banking Technology. Leadership, Innovation and Entrepreneurship as Driving Forces of the Global Economy, 361–370. https://doi.org/10.1007/978-3-319-43434-6_31
Ahmed, J. U., & Ahmed, A. (2018). Agrani Doer Banking: Agent Banking Business in Bangladesh. Business Perspectives and Research, 6(2), 154–164. https://doi.org/10.1177/2278533718765532
Amir, M. K. B. (2021). Financial Inclusions: A study on Agent Banking. Dhaka University Journal of Business Studies, 42(1), 1–16. https://doi.org/10.3329/dujbst.v42i1.59957
Ayegbeni, U. D. (2020). Agent banking and financial inclusion in Nigeria: Challenges and prospects. International Journal of Banking and Finance Research, 6(1), 32-42. Retrieved from https://www.iiardjournals.org/get/IJBFR/VOL.%206%20NO.%201%202020/Agent%20Banking%20and%20Financial.pdf
Bangladesh Bank. (2018). Agent banking Statistics. Statistics Department, Bangladesh Bank. Retrieved from https://www.bb.org.bd/en/index.php/econdata/index
Bangladesh Bank. (2023). Quarterly Report on Agent Banking (October-December 2023). Financial Inclusion Department, Bangladesh Bank. Retrieved from https://www.bb.org.bd/pub/quaterly/agent_banking/december%202023.pdf
Bizah, D. S., Gumbo, L., & Magweva, R. (2017). Agent banking as a driver of financial inclusion in Zimbabwe: A review. International Journal of Education and Research, 5(11), 89-96. Retrieved from https://8.ijern.com/journal/2017/November-2017/09.pdf
Cámara, N., Tuesta, D., & Urbiola, P. (2015). Extendiendo el acceso al sistema financiero formal: el modelo de negocio de los corresponsales bancarios [Extending access to the formal financial system: the business model of bank correspondents]. Documento de Trabajo n 15, 11(4), 1-25. Retrieved from https://www.bbvaresearch.com/wp-content/uploads/2015/04/DT15-11_Corresponsales1.pdf
CGAP/World Bank. (2012). A Guide to Regulation and Supervision of Microfinance Consensus Guidelines. Retrieved from https://www.cgap.org/sites/default/files/Consensus-Guideline-A-Guide-to-Regulation-and-Supervision-of-Microfinance-Oct-2012_0.pdf
Chaia, A., Schiff, R., & Silva, E. (2010). A New Idea in Banking for the Poor. McKinsey & Company; McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/financial-services/our-insights/a-new-idea-in-banking-for-the-poor#/
Chakrobortty, T., & Sultana, M. (2023). Financial Inclusion for Rural Community in Bangladesh through Agent Banking. International Journal for Multidisciplinary Research, 5(3), 1-11. https://doi.org/10.36948/ijfmr.2023.v05i03.2747
Ferdous, J., Mosharrafa, R. A., & Farzana, N. (2015). Agent Banking in Bangladesh - A New Era in Financial Institution by Enhancing Customers’ Accessibility and Profitability of Banks. The International Journal of Business & Management, 3(3), 206-210. Retrieved from https://www.internationaljournalcorner.com/index.php/theijbm/article/view/137602
Hannig, A., & Jansen, S. (2010). Financial Inclusion and Financial Stability: Current Policy Issues. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1729122
Hansen, A. (2013). Financial inclusion for rural areas and agriculture. Financial Inclusion in Africa, 99, 84-93. Retrieved from https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Financial_Inclusion_in_Africa.pdf
Ho, J. (2017, August 10). Why agent banking is a win-win. Business Today. Retrieved from https://www.businesstoday.in/opinion/columns/story/why-agent-banking-is-a-win-win-84309-2017-08-10#:~:text=It
Hossain, M. I., Al-Amin, M., & Toha, M. A. (2021). Are Commercial Agent Banking Services Worthwhile For Financial Inclusion? Business Management and Strategy, 12(2), 206–227. https://doi.org/10.5296/bms.v12i2.19070
Khan, S. N., & Khan, T. (2014). Agent banking, the revolution in financial service sector of Bangladesh. IOSR Journal of Economics and Finance, 5(1), 28–32. https://doi.org/10.9790/5933- 0512832
Khanam, U. S. (2022). Agent Banking: an agent of financial inclusion in Bangladesh. Global Journal of Management and Business Research, 22(B6), 81–92. https://doi.org/10.34257/GJMBRBVOL22IS6PG81
Mahmood, R., & Sarker, S. (2015). Inclusive growth through branchless banking: A review of agent banking and its impact. Journal of Economics and Sustainable Development, 6(23), 86-93. Retrieved from https://www.iiste.org/Journals/index.php/JEDS/article/view/27624
Ndungu, C. G., & Njeru, A. (2014). Assessment of factors influencing adoption of agency banking in Kenya: The case of Kajiado north sub county. International journal of business and commerce, 3(8), 91-111. Retrieved from https://tinyurl.com/a2j765
Nisha, N., Nawrin, K., & Bushra, A. (2020). Agent Banking and Financial Inclusion. International Journal of Asian Business and Information Management, 11(1), 127–141. https://doi.org/10.4018/ijabim.2020010108
Ogbebor, T. O. (2015). Enhancing financial inclusion in Nigeria through agent banking: Prospects, benefits and challenges. LAPO microfinance bank archive. Retrieved from https://tinyurl.com/tt76edp
Pervin, T., & Sarker, B. K. (2021). The Evolution and Prospect of Agent Banking in Bangladesh : A Study Based on Bangladesh Banking Sectors. Journal of Business Management and Economic Research, 5(4), 121–134. Retrieved from https://www.jobmer.org/2021/jobmer_vol5_issue4_article2_full_text.pdf
Rahman, B. (2016). The impact of agency banking to the development of SME sector: The case of Bangladesh. World Journal of Social Sciences, 6(3), 59-75. Retrieved from https://tinyurl.com/t5r687y
Rahman, M. M. (2019). Prospect and challenges of agent banking on financial inclusion in Bangladesh. Amity Global Business Review, 18-26. Retrieved from https://tinyurl.com/t54e6re
Santu, T. V. C., Mawanza, W., & Muredzi, V. (2017). An Evaluation of the Agency Banking Model Adopted by Zimbabwean Commercial Banks. Journal of Finance and Bank Management, 5(2), 58–66. https://doi.org/10.15640/jfbm.v5n2a6
Siddiquie, M. R. (2014). Agent banking, the revolution in financial service sector of Bangladesh. IOSR Journal of Economics and Finance, 5(1), 28-32. Retrieved from https://www.iosrjournals.org/iosr-jef/papers/vol5-issue1/D0512832.pdf
Sohrab, T., Idris, F., & Sulaiman, N. (2023). The relationship between financial inclusion and women’s empowerment in rural Bangladesh: The moderating effect of agent banking. Environment Social Psychology, 9(1). https://doi.org/10.54517/esp.v9i1.1955
Uddin, M. J. (2020). How the agent-based banking model might facilitate financial inclusion and sustainability in Emerging Markets and Developing Economies (EMDEs) via economic circularity? European Journal of Social Impact and Circular Economy, 1(2). https://doi.org/10.13135/2704-9906/4945
Uddin, M. M., & Sultana, A. (2019). Factors shaping the prospects of agent banking in Bangladesh. Journal of Business Studies, XL(2), 19-34. Retrieved from https://www.fbs-du.com/news_event/2715977305892.%20Md.%20Main%20Uddin%20&%20Afrin%20Sultana.pdf
Villasenor, J., West, D. M., & Lewis, R. J. (2015). The 2015 Brookings Financial and Digital Inclusion Project Report. Brookings Institution. Retrieved from https://www.brookings.edu/articles/the-2015-brookings-financial-and-digital-inclusion-project-report/
Wairi, D. K. (2011). Factors Influencing the Adoption of Agent Banking Innovation among Commercial Banks in Kenya. MBA Research Project, University of Nairobi, Kenya. Retrieved from https://tinyurl.com/t56r7edy
Published
2024-12-20
How to Cite
Kabir, M. R., Fatema, K., Das, A. B., & Barman, N. C. (2024). PRACTICALITIES OF AGENT BANKING FOR FINANCIAL INCLUSION IN RURAL AREAS OF BANGLADESH. Indian Journal of Finance and Banking, 14(2), 1-7. https://doi.org/10.46281/ijfb.v14i2.2266
Section
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Copyright (c) 2024 Mohammad Rezaul Kabir, Kaniz Fatema, Ashok Bijoy Das, Nityananda Chandra Barman
This work is licensed under a Creative Commons Attribution 4.0 International License.
