Financial inclusion in rural areas improves: BB

A recently published Bangladesh Bank (BB) report shows a significant rise in financial inclusion of the rural population, especially women, in several sectors, including agent banking, deposit, CMSME, and cooperatives.

The strong rural footprint of banking infrastructure reflects a strategic push to reach beyond urban centers, BB said in its Financial Inclusion Report Bangladesh 2024.

The report offers a comprehensive update on the country’s financial inclusion landscape as of December 2024. It states that the extensive network of financial players, emphasis on rural connectivity, and integration of mobile financial services (MFS) showcase a deep commitment to inclusivity.

Data from the report reveals that internet banking and point-of-sale services recorded strong growth during the year, reflecting Bangladesh’s strategic push towards a cash-light, digital-first economy.

Agent banking continued its rapid expansion, with total outlets rising to 21,248, of which 85.6 percent were located in rural areas. The segment now serves more than 2.4 crore accounts, holding deposits of Tk 41,900 crore. 

Notably, female ownership in agent banking reached 50 percent, indicating progress in gender inclusion.

Financial access among underserved groups also improved through no-frill accounts, which stood at 3.10 crore by the end of 2024. Nearly 70 percent of these accounts were based in rural regions, highlighting ongoing efforts to bring low-income populations into the formal financial system.

Credit flow to small businesses remained robust, with CMSME (cottage, micro, small and medium enterprises) loan disbursement amounting to Tk 62,600 crore. A growing share of this lending went to cottage and micro enterprises, supporting grassroots economic activity.

The microfinance sector remains crucial for inclusive growth, with over 42 million accounts, daily loans and savings, primarily benefiting rural and low-income populations. 

Microfinance has remained pertinent in enabling small-scale entrepreneurs, farmers, and women-led enterprises to access funds that support livelihood activities and contribute to local economies, the BB report adds.

Cooperatives remain vital for accelerating financial inclusion across rural and urban communities and have been serving over 1.25 crore members (32 lakh women).

Despite its progress, the cooperative sector still faces some challenges, including the presence of inactive cooperatives, limited manpower, and the need for stronger transparency in management, the report mentions. 

Gender and youth inclusion showed steady gains. Female-owned deposit accounts increased from 5.07 crore to 5.5 crore, an 8.48 percent rise. 

School banking programmes covered 43.8 lakh accounts, with rural areas accounting for 53.28 percent of the total, while female participation reached 49.02 percent.

As per the report, key achievements include substantial growth in digital financial services, with MFS transactions of Tk 164,000 crore in 2024, a 32.02 percent increase from the previous year and total MFS accounts rising by 8.3 percent to 238.6 million, complemented by 18.3 crore MFS agents. 

The report noted progress under the National Financial Inclusion Strategy, with 69 percent of targets fully achieved and 28 percent partially met by December 2024, while stressing the need for stronger digital literacy, infrastructure and interoperability to sustain momentum.