Agent banking loses steam amid new female participation rule

The expansion of agent banking in Bangladesh has slowed, both in terms of outlets and agents, a development widely attributed to a new regulatory requirement aimed at increasing female participation in the sector.

Bangladesh Bank data shows the number of new agent bankers fell from 16,019 in December 2024 to 15,321 in September 2025, a drop of about 4.4 per cent. Over the same time, total outlets decreased from 21,248 to 20,488, down around 3.6 per cent.

Sources familiar with the matter told The Financial Express that the contraction follows a central bank directive requiring at least 50 per cent of newly appointed agent-banking entrepreneurs to be women -- a policy aimed at promoting female participation in financial intermediation.

Bangladesh Bank Governor Dr Ahsan H Mansur first announced the policy change in March, and the regulator formalised it through a circular issued in May.

Agent banking, which allows customers in remote and underserved areas to access formal financial services through third-party operators, is considered one of the country's fastest-growing formal financial channels, serving millions who lack access to traditional bank branches.

Industry insiders say the sector could expand to at least 35,000 agents given Bangladesh's growing rural and urban economies, before reaching market-based stabilisation. Instead, numbers have remained below 21,000, a slowdown bankers directly attribute to the new gender quota.

"The main reason for this contraction is the circular," said a senior agent-banking executive at a private leasing institution. "We support women entrepreneurship, but a mandatory 50 per cent quota is extremely challenging, particularly in rural areas."

He said banks have struggled to identify qualified female entrepreneurs in villages. "Most available candidates are either financially illiterate or lack the technical capacity required to run this technology-driven business," he added.

Attempts to register licences in the names of wives of male entrepreneurs have largely failed due to skill gaps, another agent banker told the FE on condition of anonymity. He said growth had begun to slow even before the formal directives.

"This is a highly technology-focused operation, and rural women have not yet had adequate access to training and digital literacy," he said.

Some bankers, however, called for a thorough investigation by the central bank into the contraction. "There may be other reasons beyond the female participation requirement, including existing guidelines or the current economic situation," said a senior banker.

He warned that the slowdown could undermine financial inclusion efforts, especially as traditional bank branches retreat from less profitable rural areas. "Agent banking is critical in areas where traditional banks scale down operations. This channel is essential for integrating unbanked populations into the formal financial system," he added.

jasimharoon@yahoo.com