Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Nagad is poised to move into digital banking soon to make all financial transactions easily available at one’s fingertips, which will help the country upgrade its financial landscape and eventually smarten its economy all the way.
If all citizens are brought into the fold of non-cash transactions, the economic transformation will be faster and smoother, believe experts.
The government has set a target to establish a Smart Bangladesh by 2041, built upon four pillars – smart citizen, smart society, smart government, and smart economy.
Recognising the pivotal role that finances play in every aspect of an individual’s life, the financial industry’s smartisation will catalyse progress across the remaining three pillars, propelling Bangladesh into the league of developed nations, experts say.
The country’s financial industry has already gone through sea changes, thanks to MFS providers, led by Nagad, which disrupted the financial market with one after another innovations and accelerated financial inclusion of many unbanked people across the country.
According to World Bank’s Global Findex Report-2022, Bangladesh’s financial inclusion has reached 53 per cent. Such robust growth has been possible mainly because of the MFS industry’s outreach to people all over the country.
Talking about financial transactions and its future, an economist seeking anonymity said, “It is all about a journey of digital transformation. The smart economy will evolve around how well we can adopt cashless transactions.”
The MFS industry, which has witnessed massive growth riding on advanced technologies and ever-increasing smartphone users, is not just a money transfer tool anymore, rather it has evolved into a platform of different financial services designed to meet people’s day-to-day needs. From mobile recharge to utility bill payments to shopping to EMI payments, all now can be done on your MFS wallet with your fingertips.
Mohammad Zahidul Islam, head of Media and Communications, Nagad Ltd, told the FE, “But we have limitations, we cannot provide all services on our platform. Similarly, banks can't take their services to every nook and corner of the country because of high costs of operating a bank branch with the required manpower.”
Keeping it at the forefront, Nagad is going to step up with a blend of mobile money and banking services, he noted, adding that the upcoming Nagad Digital Bank will scale the entire bank down to the size of a smartphone and promise the comfort of having every banking service at the fingertips. “Our customers will no longer have to visit bank branches physically. This is the only way through which we can ensure 100 per cent financial inclusion and drastically reduce people’s use of cash,” Mr Zahidul Islam further said.
The ongoing digital transformation spearheaded by the MFS industry has contributed to people’s growing preference for cashless transactions, coming out of overdependence on physical money. The Nagad Digital Bank approved by the Bangladesh Bank will come up with quite a few products and services, which will help to further bring down cash usage and give a massive boost to the economic uplift.
Digital lending will be another much-needed disruption in the financial industry that will ensure people’s easy access to credit, especially for small ventures that are finding it difficult to secure loans in the traditional banking system. In this case, credit rating will be done based on customers’ use patterns. “We will initially give priority to micro and nano loans,” said the head of Nagad’s Media and Communications.
Elaborating on the idea of digital lending, Nagad’s head of media and communications said that borrowers will apply with a few taps on a smartphone and get money instantly after getting approval. There will be no human and banker interaction. “Thus, we can increase credit flows to the SME sector, which will increase employment, productivity and thus, triggering the country’s economic growth, apart from positively impacting livelihoods of many people,” he also said.
Nagad also looks to introduce a complete savings platform, thus helping especially rural men and women gain financial solvency. To open a savings or deposit account, customers, including farmers, workers, small traders and students, will not have to face any hassle of cumbersome paperwork or waiting in a bank or non-bank financial institution.
Nagad is now getting well-equipped with all necessary products and services that will eventually bring an end to the necessity to carry cash for any kind of financial transaction, thus speeding up the country’s transition towards a smart society.