Agent banking credit expands as rural demand picks up

The loan-to-deposit ratio (LDR) in agent banking surged to 70.44 percent in the October-December quarter of 2025, indicating a year-on-year increase driven by a gradual rise in credit disbursements in rural areas.

According to the Bangladesh Bank (BB) quarterly report on agent banking released recently, the LDR in agent banking was 57.27 percent in the same period of the previous year. The steady growth in the LDR indicates a positive trend in loan disbursement through the channel.

The LDR measures a bank’s liquidity by comparing total loans to total deposits, indicating how much of its deposits are lent.

In the reporting quarter, LDR in rural areas alone stood at 54.55 percent, whereas it was 51.71 percent in the preceding July-September quarter.

“Rural people are still getting fewer loans against their deposits compared to urban areas. But the increasing trend indicates a gradual increase in loan disbursement in rural areas,” the central bank said in the report, adding that it is closely monitoring the progress and emphasising the disbursement of loans to rural people to stimulate the rural economy.

Compared to the previous quarter, lending through agent banking grew 9.75 percent to Tk 35,023 crore in the final quarter of 2025. BB attributed this growth to increased interest among banks in developing feasible infrastructure for loan disbursement and recovery through agent outlets. Currently, 23 out of 30 banks are involved in lending through agent banking.

“The trend of banks’ engagement in lending seems promising as the volume of credit disbursement through agent banking is increasing,” BB said.

Since access to finance remains a key challenge for financial inclusion, BB added that lending through agent banking is particularly beneficial for rural customers in a developing country like Bangladesh.

As of December 2025, rural customers received Tk 22,428 crore, or 64.04 percent of the total loans disbursed through the agent banking channel. This is in line with the objective of agent banking to enhance rural access to finance, BB said.

However, a significant gender gap persists in credit distribution. Male borrowers received Tk 29,387 crore, accounting for 83.91 percent of the total loans. In contrast, female borrowers received only Tk 4,472 crore, or 12.77 percent.

“Nevertheless, there remains significant potential to identify more female entrepreneurs in rural areas who can access finance from banks through agents,” BB said.

RURAL AREAS LEAD IN DEPOSITS

The total amount of deposits through agent banking reached Tk 49,720 crore at the end of December 2025; the major share -- 82.69 percent -- of this was collected from rural areas.

A gender gap was prevalent in this case as well, with deposits in male customers’ accounts at 58.19 percent, significantly higher than the 36.96 percent held in female customers’ accounts, the report shows.

Compared to the previous quarter, deposits through agent banking increased by 4.23 percent in the reporting quarter. Deposits in rural areas grew by 4.02 percent and in urban areas by 5.28 percent.

Over the past two years, the number of accounts has increased by 20.60 percent, whereas the amount of deposits has scaled up by 36.75 percent.

“So, it can be perceived that the accounts opened through agent banking are mostly active,” BB said in the report.

REMITTANCE INFLOW RISES

The amount of inward remittances received through agent banking rose to over Tk 2 lakh crore in the October–December quarter of 2025, a 6.02 percent increase compared to the previous quarter. The central bank attributes this rise to the government’s initiative to provide a 2.5 percent cash incentive on inward remittances.

Out of the total inward remittances through agent banking, the rural population received 90.06 percent.

“The major share of the remittances is going to the rural areas, which is expected to rejuvenate the rural economy,” BB said in the report.

In remittance distribution, agent banking is providing a doorstep service, especially in rural areas, the report said, noting that in the December quarter, Tk 11,376 crore in remittances was disbursed through agent banking.

Female-owned outlets distributed almost 2.23 percent of the total remittances handled through agent banking, the report added.

“In a nutshell, agent banking is playing a pivotal role in providing adequate financial services, especially for rural women, small business entrepreneurs and beneficiaries of remittances,” BB concluded.