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Noted economist Ahsan H Mansur has called for affordable smartphones and easy internet access to facilitate the expansion of mobile financial services (MFS) and foster financial inclusion throughout the country.
While speaking at the 'National Consultation on Digital Financial Services and Financial Inclusion at the Local Level in Bangladesh' in the capital on Thursday, he underscored the importance of prudent government policies in this regard.
According to Ahsan H Mansur, the executive director of the Policy Research Institute (PRI), the private sector alone, without government support, would not be able to manufacture cost-effective smartphones or provide affordable internet services.
He expressed concerns about the uncertain investment landscape for 5G technologies, as industry players remain hesitant. According to the PRI executive director, delayed implementation of 5G infrastructure would not only impede the progress of MFS but also hinder the development of other high-end services.
To ensure the timely implementation of 5G technology, Ahsan H Mansur called for collaboration between the government and industry players in reaching a consensus on this matter.
He noted that the regulator should ensure fair and competitive markets without compromising efficiency. "The regulator must address the issue of monopoly, but not by helping any certain market player get certain market share."
Mr Mansur said awareness and financial literacy are imperative to promote the use of MFS apps. He commented that it is not possible to reduce the cost of MFS due to the involvement of multiple players in the process.
Therefore, the best way to reduce costs is to expand the use of MFS beyond cash-in and cash-out transactions to include spending and purchases, he added.
The economist also highlighted effectively establishing a cashless society and the need for rural financing. He alleged that agent banks are collecting deposits from rural areas but not disbursing loans, instead diverting the funds to cities.
At the event, PRI Vice Chairman Sadiq Ahmed said that although significant progress has been made in the digital revolution and the adoption of ICT technology, the full benefits of the digital revolution are yet to be realised, indicating that there is still a long way to go.
He also noted that there is a substantial unfinished agenda in the area of financial inclusion. According to him, important constraints in the adoption of digital financial services (DFS) are closely linked to national development challenges.
The availability and affordability of smartphones remain a major issue, particularly related to income disparities, he commented, adding that the use of internet services poses another challenge, highlighting issues such as network availability in remote areas and the reliability of uninterrupted power supply.
Referring to trust, scams and fear factors, he pointed out that they altogether reflect a lack of digital literacy as well as potential predatory behaviour that requires further investigation by MFS providers and government agencies.
Sadiq Ahmed expressed hope that the MFS providers will consider the special circumstances of the poor and disadvantaged groups in designing their loan products.
The national consultation was organised as part of the "Policy Initiative for DFS in Bangladesh" project, implemented by the PRI with support from the Bill and Melinda Gates Foundation.
Under this project, PRI commissioned three studies last year focusing on DFS use among different marginalised groups in Bangladesh to three universities: Bangladesh Agricultural University, Shahjalal University of Science and Technology and Hajee Mohammad Danesh Science and Technology University.
Dr Lila Rashid, former executive director of the Bangladesh Bank, Khondoker Shakhawat Ali, emeritus fellow at Unnayan Shamannay and visiting fellow at BIGD, BRAC, and Dr Mohammad Saidur Rahman, professor at the Department of Agricultural Economics, Faculty of Agricultural Economics and Rural Sociology, Bangladesh Agricultural University, discussed the studies.
Speaking at the event, PRI Director Dr Bazlul Haque Khondker emphasised the critical importance of engaging with regional and local-level stakeholders to generate knowledge and evidence on the use, adoption, and challenges of DFS for different marginalised communities.
Dr Khondker underscored the need to gather insights and perspectives directly from the communities that are most affected by the financial exclusion.
By involving stakeholders at the grassroots level, including farmers, the socially and economically vulnerable haor population and plainland ethnic minority communities, he said PRI aimed to facilitate a comprehensive understanding of the realities and intricacies surrounding DFS in Bangladesh.
Dr Khondker said that the objective of the consultation is to ensure that the research and policy recommendations are rooted in the experiences and needs of the people, thus paving the way for more targeted and impactful interventions in the future.
At the event, Dr Md. Akhtaruzzaman Khan, head of the Department of Agricultural Finance and Banking at Bangladesh Agricultural University, presented a research paper on the "Adoption and Potency of Digital Financial Services among Farmers in Bangladesh", highlighting the role of digital financial services in empowering farmers and enhancing the agricultural sector.
The second study presented at the event, titled "Access to Digital Financial Services for the Plain Land Indigenous Population in Northern Bangladesh", was presented by Asrafi Bintay Akram, associate professor at the Department of Sociology, Hajee Mohammad Danesh Science and Technology University.
In her presentation, Ms Akram shed light on the challenges and opportunities in providing digital financial services to the plainland ethnic minorities of Santal and Orao communities in Rangpur and Rajshahi divisions of northern Bangladesh.
Dr Md Nazrul Islam, professor at the Department of Business Administration, Shahjalal University of Science and Technology, presented the findings of the study "Impact of Digital Financial Services on Poverty of Haor People in Bangladesh: Expansion and Deepening Approach", emphasising the potential of digital financial services in uplifting the lives and livelihoods of the haor population.
The reflections from distinguished discussant Dr Lila Rashid, former executive director of the Bangladesh Bank, provided valuable perspectives on the use of DFS among the haor population, enriching the discussions further.
Ms Snigdha Ali, Bangladesh Country Lead, Financial Services for the Poor Team, Bill & Melinda Gates Foundation, urged the researchers to segregate the data on gender in the study.