MICROCAPITAL BRIEF: At AFI Global Policy Forum, Bangladesh Bank Governor Endorses Financial Inclusion to Boost GDP

Governor Atiur Rahman of Bangladesh Bank, the central bank and industry regulator in Dhaka, has reportedly called for stakeholders in the global finance sector to adopt financial inclusion strategies as a means to enhance gross domestic product (GDP) amidst a weak financial environment [1]. He charged central banks with organizing their countries’ financial institutions and markets to embrace lending systems which ensure a sufficient flow of credit to the previously unbanked sectors of their economy. Speaking at the 2012 Alliance for Financial Inclusion (AFI) Global Policy Forum at Cape Town, South Africa, he affirmed that, in 2011, Bangladesh’s economy witnessed 6-percent growth in real GDP, which he attributes to the launch of a financial inclusion campaign in the same year by the Bangladeshi government. The campaign included mapping out cost-effective means of reaching poor people in both rural and urban areas.

Among the examples Dr. Rahman cited is bank accounts with minimum balances as low as BGT 33 (USD 0.40). He also argued that the introduction of mobile financial services can be a viable solution to reaching the unbanked. So far, 23 banks have secured licenses to provide mobile financial services of which 14 have commenced operations. Mobile banking transactions in Bangladesh average BGT 33 million (USD 27.5 billion) daily.

By Chioma Okwudiafor, Research Associate

About Bangladesh Bank
Bangladesh Bank (BB) is the chief regulator of the country’s monetary and financial system. Established in 1972, BB’s mission is to regulate reserves, to manage country’s monetary and credit system and to foster development of the country’s economy. As of December 2010, BB operates nine branches and has a total staff of 5,071. The bank’s total reserves stand at USD 10 billion as at November 2010.

About Alliance for Financial Inclusion (AFI)
The Alliance for Financial Inclusion (AFI) is a Thailand-based network of financial policymakers from developing and emerging economies that aims to increase access to financial services for poor people. AFI uses a “peer-to-peer” model that enables member institutions to share knowledge and identify policy solutions for their home countries. AFI also provides grants to members to help support policy implementation. As at 2011, AFI’s member institutions represent approximately 70 countries.

Sources and Additional Resources:

[1] Daily Star Business Report: “Financial Inclusion is a way out of global crisis-Atiur”
http://www.thedailystar.net/newDesign/news-details.php?nid=251783

MicroCapital.org Story, Wednesday, October 5, 2011: “MicroCapital Brief: Bangladesh Bank Issues Guidelines on Mobile Microfinance”
https://www.microcapital.org/microcapital-brief-bangladesh-bank-issues-guidelines-on-mobile-microfinance/

Microcapital.org Story, Tuesday, March 13, 2012: “MicroCapital Brief: Central Bankers of Kenya, Tanzania Promote Africa Mobile Financial Services Policy Initiative
https://www.microcapital.org/microcapital-brief-central-bankers-of-kenya-tanzania-promote-africa-mobile-financial-services-policy-initiative/

Microcapital Universe Profile: Bangladesh Bank https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangladesh+Bank+%28BB%29

Microcapital Universe Profile: Alliance for Financial Inclusion (AFI)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Alliance+For+Financial+Inclusion

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