MFS revolution for poverty reduction: bKash is better than cash
When I was visiting different corners of Bangladesh from Chandpur to Chapainawabganj, to conduct the study on mobile financial service (MFS) revolution and its impact on poverty reduction, I heard a unique melody song in every lips of poor and low income people -bKash, better than cash.
bKash is a Bengali word and its meaning is development. In economic landscape, bKash is a mobile financial service (MFS), the largest player in Bangladesh with lion share of MFS market. It has put its multidimensional effects on lives of poor and low income people and unleashing fortunes for them.
"It's like a gift for us", said Nazmul Alam, a small shop owner at Sirajganj Main Bus Terminal who runs MFS as an additional business. "Bkash is better than cash", said Salma Akhter, an women entrepreneur living in Matlabgonj under Chandpur district. "It doesn't give us cash, but helps us to earn cash through works", she said.
And many people think it is better than cash, according to the study. A total of 301 MFS users of different economic classes took part in a survey conducted by a research team of The Bangladesh Express and all of them said bKash was their main tool as more than 80 per cent of transactions made by them are done with bKash. Only 20 per cent respondents said they use Rocket of Dutch bangle Bank and only 5 per cent said they use Sure Cash of Rupali Bank.
The big question was: How they feel with MFS? What impact it has put on their lives? bKash is a joint venture between BRAC Bank and a fintech formed by US-based Money in Motion, Bill & Melinda Gates Foundation and International Finance Corporation (IFC). Bangladesh Bank has given license to 28 banks to open MFS, but only 19 banks are active in operations leaving the lion market share with bKash. More than 23 million people across the country are transacting more than Tk 4 billion a day on an average through bKash.
"Teknaf to Tetulia, you will find bKash everywhere. Because, it helps people to meet urgent needs", said Tazul Islam, an MFS agent at Rajshahi town. Even in a remote corner of village Dhonagoda under Matlab North upzila, Monir, a landless youth now earns at least Tk 3000.00 per month through MFS service in his shop. "This earning helps me to survive as I have no lands to cultivate", he said.
"Most service holders and businessmen living in Dhaka, Chittagong and elsewhere send money to their homes through bKash", Monir said. In every corner of each villages, markets across the country, bKash presence is visible and spells the truth.
For its impressive growth rate compared to its global and local peers, bKash is a global success story in mobile banking and as well as the unique symbol of success of Digital Bangladesh. Most other countries now follow this revolution and use as a case study and a role model.
However, more than 80 per cent respondents of the study said the cost of MFS service is relatively higher compared to the service of banks. They think the authority should reduce the charge and increase agent commission to spur the growth of this innovation.
Major General Sheikh Monirul Islam, Chief External and Corporate Affairs Officer of bKash said, a major portion of the service charge goes to pockets of bKash agents as this is a network dependent support.
"Any time any where even in remote areas, you will not find any bank to withdraw or transfer cash. You will find bKash and its agents to solve your urgent financial needs. And these agents are mostly small shop owners, unemployment youths and they are improving their living standards with the commission money."
*** bKash is a Bengali word and its meaning is development. In economic landscape, bKash is a mobile financial service (MFS), the largest player in Bangladesh with lion share of MFS market. It has put its multidimensional effects on lives of poor and low income people and unleashing fortunes for them. ***
Since its inception in 2011, bKash has invested a huge amount of capital to aware the poor people to enjoy the benefits of this new MFS innovation. "We are proud of serving greater mass of unbanked population of Bangladesh. We do this with absolute sense of integrity and honest intent", Monirul Islam said. And this was acclaimed by The World Bank President Jim Kim who visited Bangladesh in 2016 and visited bKash office for its dynamic role in poverty reduction in Bangladesh which dropped by more than 13 per cent in 2016. Before leaving Bangladesh, so Jim Kim termed the bKash as the most successful service for its "low fee based business model" and "enabling the millions of unbanked to access financial services".
The study conducted by The Daily Observer in cooperation with the research team of The Bangladesh Express covered 301 MFS users of different classes of different areas and finds multidimensional effects of MFS revolution on them. bKash enables unemployment youths to earn money, helps women entrepreneurs and small product producers to increase cash sales, keep traders to safe from pitfall from advance cash sales, the study shows.
Everywhere in Bangladesh, the sing is bKash
The next question was how bKash change the lives since it is a payment system? The answers made by the respondents are almost identical with some sorts of mixed reactions over the market environment.
"I am happy with bKash, because it has provided solvency to my family which I found to be difficult prior to becoming a bKash agent." Before bKash came into the race, Nazmul Alam was unemployed and faced hardship to maintain his family. He said his daily income from bKash business ranges between Tk 300.00 and Tk 400.00, which is enough to educate his two daughters.
"Most service holders and businessmen living in Dhaka, Chittagong and elsewhere send money to their homes frequently. I serve them with bKash and earn Tk 3000.00 on an average a month". Hundreds of garment workers, service holders and businessmen of this area are living in different cities and use bKash to send money to their homes. "BKash has given us the opportunity to maintain our family through our small shop", he said.
Shimul, a mango farmer at Shibgong under Chapainabagonj is also grateful to bKash as" it has given him opportunity to sell mango without interference of middlemen. "Earlier, I sold mango through middlemen and fell into cash crisis. Now I receive payments through bKash, then deliver mangos through couriers", he explained. Mango traders of Banessor under Rajshahi, betal leaf traders and hilsa fish traders of Chandpur also see the bKash as their business growth.
Not only traders and unemployment youths, women workers and entrepreneurs also are singing the bKash song. The study covered 52 females of different classes, while 26 were garment workers and 14 entrepreneurs and 12 were housewives. bKash has enabled large segment of RMG workers especially the women workers to send money to their families in real time, with convenience and at low cost, while women entrepreneurs said their income have increased significantly thanks to bKash payment system.
The RMG and textile industries have been important means of economic security for women in Bangladesh, which is fundamentally necessary for poverty reduction and economic growth. Most garment workers are female who said they use MFS particularly bKash to meet their urgent needs and send money to their relatives at lower cost. And thus it helps them to save money for their future.
"Without bKash we can't think to live now", said Nujahan, a garment worker at Malibagh Chowdhury para in Dhaka city.
bKash: A gift for us
From remote village to hat bazaar to university campus, bKash is everywhere. People trust bKash and see it as a gift. Bikash Chandra , a young of 30 living in Rajshahi city is one these people.
Bikash Chandra have a small shop at Allupotti in Rajshahi city to sell fuel wood in a small space. Once he had to shut down his shop as demand for wood dropped significantly after people started using fuel gas. But his fate changed after the bKash made the storm in payment market. Today, his main business is payment service mainly with bKash and he earns at least Tk 3000 per month from bKash business. His total monthly income ranges between Tk 5000 to Tk 8000, enough to meet deficit of his family through bKash.
Rajshahi is well known as the city of education and a large number of students are coming from poverty stricken north Bengal areas. Rajshahi University is the second largest university in Bangladesh with more than 28000 students and teachers. Students receive money from their parents to pay tuition fee and other expenses. Officials of Agrani Bank at the campus said their volume of business has dropped significantly over the years as students prefer bKash to receive money from their parents.
"bKash is a revolution and has made lives easy and dynamic', said president of Rajshahi University Press Club. "With bKash service, a large number of youths at Rajshahi city are earning a handsome amount of money as most students are living in city's messes", he said. At least 20 bKash agents are active in campus area to serve these students.
Professor Mustafizur Rahman, Chairman of Sociology Department, Rajshahi University said bKash transactions are simple to conduct and accounted for in the formal financial system. This helped this unique innovation to touch the hearts of all types of people and businesses from the self-employed rickshaw pullers to small business owners, Prof Rahman explained.
"bKash is a game changer for poor. It has multifaceted effects on people of all strata. It's a necessity of life", he said.
The writer is Economic Editor of The Daily Observer and he can be reached at [email protected]