Bangladesh is a rapidly transitioning market with a fast-growing economy.

In the first quarter of 2019, Bangladesh was the world’s seventh fastest-growing economy with a rate of 7.3% real GDP annual growth as per the report of IMF (International Monetary Fund). The GDP rate is further expected to increase by 10% within the next 5 years.

However, these developments have not come the easy way and there is a long way to go.

In Bangladesh, with a population of over 160 million, close to 55% of the adults were financially excluded under the modern financial industry (Source: Finclusion). The large undeserved population is mostly because of the high cost of financial transactions and lack of financial infrastructure. Other reasons for the exclusion include lack of diversified financial service offerings, an existing collateral-based system for loan disbursement, low level of financial literacy, and information symmetry.

With such challenges facing the ecosystem, the emergence of Fin-tech was essential to address the large unbanked population of Bangladesh by providing Digital Financial Service offerings catering to the special needs of the under-served segment. Eventually, the industry is growing enormously and is expected to reach an investment of USD 70 billion by the year 2020.

Bangladesh has largely been a cash-based economy where nearly 90% of transactions are done in cash. This made it difficult to transact, share and save money. It’s only the Fintech revolution that can reduce the usage of physical money and move the cash-based economy to a digital one. The credit and debit card culture is distant wherein the debit card penetration is approximately 5.5%, while the credit card is about 0.5%.

Moreover, Bangladesh does relate to the benefits of going paperless. Most of the banks are taking a shift to implement paperless data management. Fintechs can help in the transition from paper to paperless banking by providing all solutions digitally. – Regulations will also play an important role in driving the change. The advent of e-KYC will bring new avenues of growth.

Another interesting and noteworthy fact is that a big portion of foreign currency in Bangladesh has been earned through the remittance. Bangladesh is the ninth highest recipient of remittances according to a World Bank report. Fintech can play a boon in improving the remittances and payment process.


One of the early players to assess the need for Fintech; bKash (Subsidiary of BRAC Bank) has already created a niche in Bangladesh’s Fintech ecosystem. Six years since its launch, the service has accumulated 30 million registered users and 80% of the market share, exemplifying how fast the mobile payments ecosystem is growing and improving people’s lives. The significant impact which has been created by the Fintech introduction has paved the path for other players, as there is a huge population that is under-served.

Fintechs like Yabx (a Mahindra Comviva incubate), too are in sync with the fin-tech ecosystem in Bangladesh and believe there is a massive opportunity of digital penetration to provide deeper reach to Fin-techs. Yabx believes that digital inclusion is a step to enhance financial inclusion. Yabx has recently partnered with Robi, the leading telecom services provider in Bangladesh, to facilitate financing for smartphones for Robi’s subscribers in Bangladesh.

The government and the financial regulatory authorities are also trying to remove the roadblocks on the way to Fintech Revolution. The Govt. of Bangladesh has set the time period for implementation of the first National Financial Inclusion Strategy (NFIS) from 2019-2024.

The government’s financial inclusion strategy is to promote a “Digital Bangladesh” that includes the usage of mobile money and other digital payment platforms.

An inter-agency working group – consisting of the central bank, Bangladesh Financial Intelligence Group, Election Commission, Bangladesh Telecommunication Regulatory Commission, Access to Finance (A2i), ICT ministry and some other financial institutions — is working on formulating the final guidelines for the electronic Know Your Customer (e-KYC). Those with approved e-KYC will be allowed limited scale transactions, ranging from Tk 20,000 to Tk 5 lakh, which will prove to be a significant step in financial inclusion.

It’s quite evident that Bangladesh has opened its arms to the digital transformation.  As per reports, in 2018, 35% percent of adults were digitally included via mobile money, bank, or NBFI account with digital access compared with 28% in 2017.

As per industry reports, the total number of Mobile Phone subscribers was 158.438 Million whereas the total number of Internet Subscribers has reached 92.061 Million, as on March 2019. The Small and Medium Enterprises (SMEs) sector has significantly benefited by the access to quick and easy short-term business loans, even to the consumers with no previous credit history.

Few businesses and garment manufacturing companies are taking a step ahead by digitizing the wage payment system from cash to mobile money. They have further partnered with bodies like Business for Social Responsibility (BSR) to provide financial literacy training to workers.

So much so, even the Mom & Pop stores in Bangladesh are transitioning the way the business is conducted by using digital payment modes.

From the recent trends & developments; we see that there is a substantial opportunity for Fintech companies to set their foot in Bangladesh financial ecosystem, by introducing innovative products with a relevant value proposition for both the consumers and the providers.

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