Financial Innovation

Socio-Economic Impact of Mobile Banking on Rural Bangladesh

--Manuscript Draft--

Manuscript Number: FINI-D-17-00032

Full Title: Socio-Economic Impact of Mobile Banking on Rural Bangladesh

Article Type: Case Study

Abstract: This paper aims to explore the socio-economic impact of mobile banking on rural
Bangladesh. It also tries to detect the rural people's perception about the new financial
phenomena. As like as many other developing countries most of the people in
Bangladesh still have no access to formal banking sector. Only 15 percent adult people
have bank accounts, though 74 percent people use mobile phone. As part of the
government's financial inclusion program, the central bank allowed 28 banks to provide
mobile-banking; to date, 19 have launched the service. People both urban and rural
are using the new technology to transfer money, receive salaries or pay bills from their
accounts without visiting any bank branch. As the development of Bangladesh
depends on the rural people, it is important to know the exact socio-economic impact of
mobile banking on rural areas. This study addressed following empirical questions:
How does the financial inclusion benefit rural people? Does it spark entrepreneurship
and job creation? Does it increase people's savings tendency? Does it help people to
respond to shocks? How does it help rural people to improve their health and
education? To find the answers this study has taken semi-structured interview of 50
mobile bank users of Hatirdia village in Narsingdi district. Applying grounded theory
and hermeneutics approaches, this study finds that mobile banking affects positively in
the socio-economic development in rural Bangladesh. Its impact on employment
creation, business, savings behavior, remittance, expenditure, agriculture, health care,
education and women empowerment is good. The growing uses of mobile banking
decreases the use of informal channels of financial services which have the inherent
risks of leakage, fraud, and corruption. This study also finds that rural people use the
services of mobile banking as it is easy and fast.

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4 Abstract
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8 This paper aims to explore the socio-economic impact of mobile banking on rural Bangladesh. It
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10 also tries to detect the rural people’s perception about the new financial phenomena. As like as
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13 many other developing countries most of the people in Bangladesh still have no access to formal
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15 banking sector. Only 15 percent adult people have bank accounts, though 74 percent people use
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17 mobile phone. As part of the government’s financial inclusion program, the central bank allowed
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20 28 banks to provide mobile-banking; to date, 19 have launched the service. People both urban
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22 and rural are using the new technology to transfer money, receive salaries or pay bills from their
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25 accounts without visiting any bank branch. As the development of Bangladesh depends on the
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27 rural people, it is important to know the exact socio-economic impact of mobile banking on rural
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30 areas. This study addressed following empirical questions: How does the financial inclusion
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32 benefit rural people? Does it spark entrepreneurship and job creation? Does it increase people’s
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savings tendency? Does it help people to respond to shocks? How does it help rural people to
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37 improve their health and education? To find the answers this study has taken semi-structured
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39 interview of 50 mobile bank users of Hatirdia village in Narsingdi district. Applying grounded
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42 theory and hermeneutics approaches, this study finds that mobile banking affects positively in
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44 the socio-economic development in rural Bangladesh. Its impact on employment creation,
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47 business, savings behavior, remittance, expenditure, agriculture, health care, education and
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49 women empowerment is good. The growing uses of mobile banking decreases the use of
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52 informal channels of financial services which have the inherent risks of leakage, fraud, and
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54 corruption. This study also finds that rural people use the services of mobile banking as it is easy
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and fast.
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60 Key words: Mobile Banking, m-Banking, Rural Bangladesh, Socio-economy.
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4 1 Introduction
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8 Banks are the mainstream of the financial system of a country like Bangladesh. Because of close
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10 relationship between economic and financial development, the banking system must be robust,
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13 resilient and sound for efficient intermediation of financial resources. For that reason, sound
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15 macro-economic environment, effective bank management strategies and prudential financial
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17 regulations are the means. However, as like as many other developing countries most of the
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20 people in Bangladesh still have no access to formal banking sector. Only 15 percent adult people
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22 have bank accounts, though 74 percent people use mobile phone (Haque, 2013). As part of the
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25 government’s financial inclusion program, the central bank allowed 28 banks to provide mobile-
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27 banking; to date, 19 have launched the service (The Daily Star, 2014). Due to its easy transaction
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30 services mobile banking has become popular among Bangladeshi people within a short span of
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32 time. People both urban and rural are using the new technology to transfer money, receive
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salaries or pay bills from their accounts without visiting any bank branch. The growing usage of
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37 mobile banking encourages experts and policy makers to believe that it will lead the country’s
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39 economic growth as well as overall reduction in inequality (Rahman, 2014). As Bangladesh is
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42 still an agricultural country where 70 percent people live in the rural areas, the development
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44 depends on rural people. So, it is important to know the exact socio-economic impact of mobile
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47 banking on rural areas. This study addressed following empirical questions: How does the
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49 financial inclusion benefit rural people? Does it spark entrepreneurship and job creation? Does it
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52 increase people’s savings tendency? Does it help people to respond to shocks? How does it help
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54 rural people to improve their health and education? To find the answers this study takes a village
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56 named Hatirdia of Manohardi upazila in Narsingdi district as a case study. This study engages a
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59 multi-level, multi-method approach to the analysis of the impact of mobile banking on rural
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4 Bangladesh. This study will help us to know the socio-economic impact of mobile banking on
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7 rural areas where most of the people have no access to formal banking sector. This experience
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9 will help the policy makers of not only Bangladesh but also other developing countries to
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12 improve the socio-economic status of rural people by utilizing mobile banking services
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14 effectively.
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20 2 Socio-economic Status of Bangladesh
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22 Bangladesh is an agrarian country where around 70 per cent people live in rural areas. Though
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25 the socio-economic condition of the country has improved in recent years, it is not good enough
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27 yet. Recently, Bangladesh has become a lower-middle income country with the Gross National
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30 Income per capita (GNI), joining those with annual incomes of $1,046 to $4,125 (Bdnews24,
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32 2015). However, Unicef (2008) data shows that 84 percent of the population - or 129 million
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people – live on less than $2 a day. This is despite an increase in national income per capita. The
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37 number of people living on less than a dollar a day has increased from 36 per cent to 41 per cent
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39 in the last three years. The poverty gap is widening. Many children of the disaster-prone country
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42 have to work to manage foods for his/her family and are denied an education. An estimated 5
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44 million children aged 5 to 14 years are working. Many of them work under dangerous
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47 conditions. Poverty is the main cause of child labor. Net primary school enrolment rates are 93
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49 per cent for boys and 96 per cent for girls (Unicef, 2008). However, the dropout rate is high.
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52 Fewer than half the children who complete primary school reach expected competencies because
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54 of poor teaching methods, overcrowded classrooms and a lack of home support. Despite these
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56 barriers, the adult literacy rate of the country is increasing. It is estimated at 61 per cent in 2015
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59 (The Daily Star, 2015). Dowry and dowry-related violence are widespread and pose serious
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4 threats to women. Women are the most likely victims of acid attacks. Bangladesh has one of the
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7 highest rates of child-marriage in the world. Nearly two-thirds of adolescent girls are married
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9 (10-19 years) (Unicef, 2008). On the other hand, Bangladesh Bureau of Statistics (BBS) says the
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12 life expectancy at birth in the country has increased on average by 0.64 years annually over the
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14 last five years reaching 70.4 years in both sexes in 2013 from 67.2 years in 2009 (UNB, 2015).
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20 3 Mobile Banking and Bangladesh Scenario
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23 New information and communication technologies have brought many opportunities for people.
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26 Mobile banking is one of them. It is a banking process which provides financial services through
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28 mobile technology devices i.e. mobile or cellular phone. This new technology helps the
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unbanked communities to get financial services efficiently and at affordable cost. Mobile
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33 banking is used for performing bank checks, account transactions, payments, credit applications
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35 and other banking transaction through a mobile device. The system not only consists to withdraw
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38 money but also to transfer money within a very short time.
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41 Mobile banking (also known as M-Banking, mbanking and SMS Banking) can be conducted
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44 through the internet browser on the phone, through a program downloaded from the bank, or by
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46 short-messaging service (SMS). Customers if they have mobile phone and are registered for this
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can avail banking service through using it. Therefore, sitting in front of a computer is not a
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51 requirement anymore; accessing accounts can occur while users are waiting their turn at the
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53 dentist clinic or relaxing at the beach! (Al-Akhras and Qwasmi, 2011). The earliest mobile
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56 banking services were offered via SMS in the early 2000s. As the size and capabilities of mobile
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58 devices increased in the mid 2000s, so did the effectiveness of mobile banking. Banks introduced
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4 services that accommodated more types of cell phones and mobile devices, including smart
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7 phones.
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10 In Bangladesh, mobile banking service was inaugurated by ten leading banks on 31 March 2011.
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13 At the inaugural press briefing Bangladesh Bank governor Atiur Rahman said ‘Mobile banking
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15 is an alternative to the traditional banking through which banking service can be reached at the
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17 doorsteps of the deprived section of the society.’ The central bank governor also said through
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20 mobile banking various banking services including depositing and withdrawing money, payment
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22 of utility bills and reaching remittance to the recipient would be possible (Sadia, 2013). Among
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25 the 10 banks Dutch-Bangla Bank Limited (DBBL) serves the wide and own structured network
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27 at first. Moreover, DBBL has introduced its mobile banking service expanding the banking
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30 service from cities to remote areas for the first time.
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33 Any cell phone owner of any provider can easily open an account for the mobile banking service
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35 by going to the approved agents throughout the country. The subscribers merely need submit
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38 necessary papers to open the account. The subscriber will be given a four-digit PIN to avail of
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40 the banking service. By using the PIN s/he can operate all types of banking services including
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43 depositing and withdrawing money maintaining security and secrecy of his/her account. The
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45 customer will hand over cash to the agent and the agent will initiate the transaction from his/her
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48 mobile phone, the agent will help the account holder to do the banking using his PIN. According
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50 to the central bank guidelines, the transaction limit for an account holder is fixed at a maximum
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52 amount of Tk 25,000 on a daily basis. The limit is applicable for any number of transactions. The
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55 Bangladesh Telecommunication Regulatory Commission (BTRC) has set the charge at 2 percent
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57 for each transaction for ‘cash-in’ and ‘cash-out’ purposes and Tk 5 for the lowest amount of
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60 transactions for mobile banking. However, the registration fee, salary and remittance
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4 disbursement services will be provided free of cost. Among the mobile banking service-
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7 providers, ‘bKash’ has set its charge at 1.85 percent for remitting money, Dutch-Bangla Bank at
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9 2 percent and Islami Bank at 1.5 percent under mobile banking services.
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13 The central bank allowed 28 banks to provide mobile-banking as part of the government’s
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15 financial inclusion program. To date, 19 have launched the service. Due to its easy transaction
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17 services mobile banking has become popular among Bangladeshi people within a short span of
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20 time. People both urban and rural are using the new technology to transfer money, receive
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22 salaries or pay bills from their accounts without visiting any bank branch. Mobile banking
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25 services have succeeded to include many unbanked rural people to the formal banking system
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27 (Ahmed, 2011). Bangladesh Bank (BB) data shows some three million people make now the use
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30 of different services under mobile banking. There are about 70,000 outlets of mobile banking
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32 service-providers across the country, making the services available to the users. Some USD 32
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million is being transacted through this banking in the country everyday and Bangladesh is in the
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37 seventh position in providing mobile banking services in the world. Another account shows that
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39 the volume of mobile banking transaction is 5.6% of the country’s GDP (Ahmed, 2014). It is
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42 observed that person to person money transfer—‘cash in’ and ‘cash out’—are the most popular
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44 types of transactions. However, study reports say, in Bangladesh, the mobile banking users of
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47 rural areas are 7.40 times more likely to achieve moderate improvement than weak improvement
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49 on livelihood compared with the users of urban areas. Similarly, the mobile banking customers
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52 of semi-urban areas are 5.15 times more likely to have moderate improvement than weak
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54 improvement on livelihood compared with the customers of urban areas (Sadia, 2013).
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57 At present, bKash, the Brac Bank-initiated mobile banking service, is the country’s leading
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60 service-provider in mobile banking. bKash has 58,000 agents across the country with around 4
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4 million clients and 20 percent of them transact regularly. DBBL, which has mobile banking
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7 outlets even at the union council level, is next in line, after bKash, as service –providers in
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9 mobile banking, in terms of volume of transactions, clientele coverage and number of personnel,
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12 directly or indirectly, involved in the process of making such services available to the people.
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14 The company’s mobile banking subscribers stood at around 12 lakh till April 2014 (The
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17 Financial Express, 2013).
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22 4 A case study on Hatirdia village
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25 For this study Hatirdia village, situated some 75 kilometre away from Dhaka, capital city of
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28 Bangladesh, is selected as it is an ideal village in the country. The area and the population of the
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30 village are around 2.5 square kilometer and 3,000 respectively. Though Hatirdia is a business
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hub in the area, most of the people of the village are involved in farming or agri-based business.
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35 There are one government primary school, a high school and a college in the village. The literacy
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37 rate is 60 percent. Two banks—Janata Bank, state owned commercial bank, and Krisi Bank, state
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40 owned specialized bank for farmers, are situated in the village. However, most of the people
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42 don’t have any account with these banks. Only 20 percent adult people have bank account and
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45 most of them are businessmen or foreign remittance receiver. However, a good number of
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47 farmers have opened bank account with the banks recently as the central bank allows them to
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50 open an account by only Tk 10. Despite of this, most of the people use mobile banking service
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52 since its inception due to its easy method.
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55 This study involved a qualitative investigation of 30 mobile bank users and agents of the village.
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58 Primary data has been collected through different in-depth interviews of these individuals.
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60 Secondary data has been collected from newspaper and journal articles. To interpret the
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4 interview texts grounded theory (Strauss & Corbin, 1990) and hermeneutics analysis (Packer,
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7 2011) approaches are applied here.
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5 Economic Impact of Mobile Banking
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17 Various study reports say that growing financial inclusion increases a nation’s GDP. As
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19 entrepreneurs with business ideas gain access to credit, economic activity grows, and new
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22 businesses and jobs mean a more productive society. In addition, there is an accounting benefit
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24 from the formalization of savings within the banking system, as this will power further credit
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creation, increasing investments. A study says that with the mobile financial services adoption,
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29 Bangladesh could see a GDP increase of US$6 billion, or 2 percent, by 2020 (BCG, 2011).
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31 Mobile banking services will help the country such way in the economic development. In our
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34 studied village we also find this true.
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37 5.1 Impact on New Job Creation
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40 It is said that increased access to finance facilitates entrepreneurship, new business creation, and
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42 new jobs. A World Bank study also finds a 1 percent increase in financial inclusion corresponds
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to a 0.51 percent increase in business creation, and a 15 percent inclusion increase leads to
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47 employment growth of 1 percent (BCG, 2011). In Hatirdia village the mobile banking has helped
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49 a group of unemployed youth to launch an entrepreneurship. Most of them are directly involved
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52 in mobile banking as an agent. The agent gets a commission from the bank in every transaction.
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54 Some of them were involved in mobile phone and accessories business before being an agent.
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57 However, this new business has become their main business and many of them had to appoint an
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59 assistant to manage customers. Lokman Mia said,
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4 I started my business with mobile accessories. But the profit was so limited and I
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7 had to plan to change my business. But when I have become the agent of bkash
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9 and DBBL mobile banking fortune has started to favor me. Now mobile banking
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12 is my main business. To manage the huge customers I recruited an assistant (Mia,
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14 2014).
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5.2 Impact on Business
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21 Mobile banking service has huge impact on rural business. Before the mobile service era, small
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23 businessmen had to make their payment to the whole seller by going to him/her physically. It
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26 was huge time and money consuming process. Now they can make the payment easily through
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28 the mobile banking service. Md. Ataur Rahman, a small agri-product businessman, is one of
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them. He neither received any formal education nor had a bank account. The 42- year-old man
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33 described his experience,
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36 It was really hard for me to open an account in a traditional bank. Because the
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39 process was so complex for me and I feel worried to go to a bank office. That is
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41 why I had to go to another district regularly to make the payment to my whole
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44 seller. It took a day and most of the time I had to close my shop on this day. But
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46 in the age of mobile banking the process is easier now. I have opened an account
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in a mobile banking service provider since the process is simple and easy.
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51 Nowadays, by paying the payment through mobile bank, I also request my whole
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53 seller over phone to send products from other districts. I didn’t face any problem
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56 in this process. Life is very easy now (Rahman, 2014).
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4 Apu Sarkar, a small retail fruit seller, has similar experience. Though he has bank account with
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7 two different banks, he feels comfort to make his transaction through mobile banking. The 24-
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9 year-old man said,
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13 The transaction process in a traditional bank is not so easy for an illiterate man
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15 like me. Moreover, the bank does not allow me to make transaction anytime I
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17 needed. It has limited working hours and two holidays in a week. But as a
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20 businessman we have to send money in emergency case very often. The mobile
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22 banking provides me the service. Nowadays I can send money anytime to the
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25 whole seller whenever needed. It is less expensive and time consuming comparing
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27 to other banking (Sarkar, 2014).
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5.3 Impact on Remittance and Illegal Transaction
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34 Bangladesh’s economy greatly depends on foreign remittance nowadays. Huge numbers of
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36 Bangladeshi citizen are working in abroad and they send foreign currency regularly. Important
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39 fact is that most of them are from rural areas. Another point is that a good number of people have
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41 opened bank account to merely collect the remittance. Different traditional banks are also trying
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44 to attract customers by offering various opportunities so that they transact their foreign
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46 transaction through their banks. A good number of people are taking these opportunities. But still
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in many cases, especially in emergency, they depend on informal transaction called hundi.
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51 Mobile banking service greatly impact on this sector. As the process is easy, rural people use it
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53 and the illegal transaction is decreasing day by day. Abdul Jalil, a farmer, regularly receives
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56 foreign remittance from Saudi Arabia. He said,
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4 My elder brother has been working in Saudi Arabia for five years and he sends
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7 me money every month. Before the mobile banking era it was hard for me to
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9 collect the money from traditional bank. That’s why we made the transaction
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12 through hundi. But the days are past now. My brother sends me money directly to
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14 my mobile account nowadays and I cash-out it from a mobile banking agent
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17 easily (Jalil, 2014).
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20 5.4 Impact on Savings Behavior
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23 As most of the rural people are not involved in formal banking, their saving tendency is not
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26 good. They often take loan with high interest from local money lenders. Many people are also
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28 involved in informal savings. Mobile banking has also brought a change in this sector. Most of
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the people who have a mobile bank account and transact money regularly save an amount for
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33 emergency case. Basir Ahmed is one of them.
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36 I don’t have any savings account in any bank. That’s why I didn’t have any
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39 savings. I had to borrow money from others in emergency case. Several times I
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41 took loan on high interest rate from local money lenders. But now I keep an
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44 amount in my mobile bank account. In every transaction I save a percentage of
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46 money. I also get interest from my bank against my savings (Ahmed, 2014).
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53 5.5 Impact on Agriculture
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56 Agriculture is the major sector of Bangladesh economy. According to new GDP measurement
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58 system, it provides about 13.09 percent of the country’s GDP. It is also said that formal financial
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4 inclusion of farmers would boost up the development of this sector. Realizing the fact
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7 Bangladesh Bank has been allowing farmers to open a bank account by only Tk 10 so that they
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9 can take the benefits of different government financial programs. Following the decision, as
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12 mentioned earlier, a good number of farmer of Hatirdia village has opened bank account in two
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14 traditional banks. However, in emergency cases farmers have been dependent on local money
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17 lenders since mobile banking service is available. They can now manage money from their
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19 relatives or friends any time through mobile banking. Shamsul Islam, a farmer, explained his
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experience,
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25 Before the mobile banking era I had to struggle to manage money to buy
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27 fertilizers, pesticides or seeds in emergency. Now I call my brother working in
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30 abroad and he sends me the money through mobile banking. I don’t need to take
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32 loan or borrow money from others nowadays (Islam, 2014).
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35 5.6 Impact on Consumption
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39 Easy access to money is also changing the consumption habit of rural people. People, especially
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41 the relatives of expatriates, spend most of foreign remittance to buy luxury products. It has
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44 become a common case in the area that people go to the market and manage money through
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46 mobile banking to complete his/her shopping. Moreover, many shops in the city area have the
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facilities of payment through mobile banking. Rural people also use this facility when they go to
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51 the city. Due to the availability of Internet, people also often order products through internet and
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53 complete the payment through mobile banking.
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57 Rokeya Begum, a housewife, said,
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4 Sometimes I need urgent money to complete my shopping in the market. That
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7 time I phone my husband who works in abroad to send me money through mobile
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9 banking. Due to the mobile banking service shopping has become easier for me
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12 nowadays. In past, I had to return home without completing shopping very often
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14 due to the shortage of money (Begum, 2014).
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5.7 Impact on Other Economic Activities
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21 Mobile banking makes different economic activities easy in rural and urban Bangladesh. People
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23 don’t have to go different places to collect or pay money nowadays. It saves people money and
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26 time a lot.
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29 Ziaul Haq is a government employee. He has an apartment at capital city and it is rented. He
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31 said,
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35 I had to go to Dhaka every month to collect the house rent. It was not only boring
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37 but also time and money consuming job for me. Now I collect the house rent
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40 through my mobile bank account easily. In this way mobile banking makes the
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42 world smaller to me (Haq, 2014).
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45 People are using the mobile banking facilities to pay different fees. Lutfor Rahman, a
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48 primary school teacher, said,
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51 I have been trying for better government jobs and sometimes I need to pay the job
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application fee through mobile. The mobile payment system is helping me a lot
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56 since it’s easy and time saving (Rahman, 2014).
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4 6 Social Impact of Mobile Banking
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8 Mobile banking not only included unbanked people to formal financial system but also has huge
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10 social impact on rural Bangladesh. It is aiding in securing economic stability, reducing poverty,
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13 and fostering rural development as it benefits education, health, and entrepreneurship. However,
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15 the mobile banking service is also being used by criminals to collect money as extortion and
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forgery.
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21 6.1 Impact on Health Care
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24 Serious injuries and funerals can have a devastating effect on the poor. A study shows the
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potential harm of health shocks on the poor in Bangladesh. In the study, food shortages occurred
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29 in 35 percent of the cases, children dropping out of school in 10 percent of the cases, resorting to
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31 child labor in 11 percent. Fully 60 percent of these households never recovered from the damage
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34 caused by health shocks (BCG, 2011). Mobile banking is helping the rural people to mitigate the
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36 impact of health shocks by providing different facilities. People can easily save money for future
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39 health care costs with mobile banking service. Moreover, they can manage money immediately
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41 which improves their chances of receiving immediate health care access. Ahsan Kabir, 39, a
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44 businessman, shared his experience how he was benefited from mobile banking in medical
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46 purpose. He said,
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Few days ago I went to Dhaka for medical treatment. The day was a public
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51 holiday and I needed money to do some urgent medical tests prescribed by
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53 doctors. I was searching for money and mobile banking relief me from anxiety.
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56 One of my relatives sent money through my mobile bank account. Finally I could
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4 complete my medical treatment successfully. Otherwise, I would have to go to
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7 Dhaka next week for those tests (Kabir, 2014).
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9
10
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12 Muslesh Uddin, 62, also found positive impact of mobile banking on health care. He said,
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15 My son is an executive of a readymade garment. Before the mobile banking era,
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17 he came to home in every month for giving me the monthly family expenses. On
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20 those days, in case of emergency especially for medical, formal banking could not
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22 help us. Now my son send me money at my mobile account anytime that makes
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25 my life flexible and tension free (Uddin, 2014).
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31 6.2 Impact on Education
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35 Education is the backbone of a nation. But the education system of Bangladesh especially
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37 in rural area is not good enough. People have to send their children in cities for better
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40 education. But the money transaction process was so complicated and time consuming
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42 before the mobile banking era. In emergency cases, especially in examination period,
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students had to struggle to manage the tuition and examination fees that hampered their
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47 examinations. But the process is very easy now. Hasibul Hasan Onik, 22, a university
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49 student, said,
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51
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53 I have experience to receive money from my father in three ways—
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55 banking channel, post office and mobile banking. Comparing with other
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ways I have found mobile banking is less expensive and simple. That’s
59
60 why I told my father to send my education expenses through my mobile
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4 bank account. I can get the money immediately that relief me from anxiety
5
6
7 (Onik, 2014).
8
9
10 Md. Tanver Ahammed, 31, a private executive, provide education expenses to his sister who
11
12
13 lives in another district. He said,
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15
16 Mobile banking provides me a relief from tension regarding sending money to my
17
18 sister. Otherwise I had to make a plan to manage a time to go to bank or post
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20
21 office for sending money. Nowadays my sister collects money from an ATM
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23 booth any time through mobile banking (Ahammed, 2014).
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25
26
27
Mobile banking is also helping the students to pay different fees and to buy books.
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29 Gobinda Sharma, a university student, said,
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32 When I have tried to admit in a university I had to apply in different universities.
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35 Utilizing the mobile banking service I could easily pay the application fee.
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37 Moreover, sometimes I order books in online and pay the price through mobile
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39
40 banking. Without the service it would be hard for us to collect many books
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42 (Sharma, 2014).
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44
45 6.3 Impact on Women Empowerment
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49 Mobile banking service has an impact on rural women empowerment. Before the mobile banking
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51 era, women had to depend on men for almost every economic activity as they usually don’t go to
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market. Now they can make their transaction themselves. Swapna Rani Sharma, 38, said,
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57 I work in a house in my village as a housemaid. As the owner of the house lives in
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59 another district he pays my salary through mobile bank every month. If there
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4 would not be the mobile banking service, I would have to depend on my husband
5
6
7 or any other man to collect the money from post office in the market. Now, I can
8
9 do it myself. Moreover, I can call my owner to send me money in emergency
10
11
12 through the mobile banking. I think it makes me self dependent (Sharma, S.R.
13
14 2014).
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17
18
6.4 Impact on Criminal Activities
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21 Besides of many positive social impacts mobile banking service is also helping criminals
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23 to do criminal activities. Nowadays, many extortionists collect the extortion through
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25
26 mobile banking. Many illegal money transactions are also being done by this new
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28 service. Moreover, a group of fraud people managing money by forgery. Joigon Begum
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30
31
described her experience,
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34 Few days back I received a phone call of a man who said that I had got a
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36 prize of Tk 50,000. To collect the money he told me to send Tk 2000 to a
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38
39 mobile number. He said it is the processing fee. I believed him and sent
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41 the money. But I don’t get my prize yet.
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44
This type of forgery becomes common in the country nowadays. Most of the time poor
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47 and illiterate people become the prey of this fraud people. Sometimes some fraud mobile
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49 bank agents also do forgery with the rural illiterate people. Mehedi Hasan, 27, has such
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51
52 kind of experience.
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55 Last month I requested my elder brother, who works in abroad, to send me
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some money through an agent number. My brother did the same in the
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60 next day. But when I demanded the money the agent said that he didn’t get
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4 any money. But my brother was saying that he sent the money. Though it
5
6
7 was clear that the agent was making forgery I couldn’t collect the money,
8
9 as I didn’t have any proof (Hasan, 2014).
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11
12
13
14
15
16 7 Discussion and Conclusions
17
18
19 Bank plays a great role in the economic development in every country across the world. If the
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22 banking system of a country is strong, the socio-economic status of the country must be strong.
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24 Banks are functional in the process of savings, capital formation, investment, production in the
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26
27
rural economy. As human life is becoming more frequent day by day in touch of technology,
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29 banking system has to adjust with this. Mobile banking is one of the tremendous touches of
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31 technology in banking sector. Though this technology has been populated in developed country
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33
34 earlier, in Bangladesh it was a dream for this opportunity in banking. But through the progress of
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36 Digital Bangladesh the dream has come true. Rural people are also using the easy and fast
37
38
39 banking service as like as urban people across the country. They have taken this service as an
40
41 opportunity and a mean to make their lives easy, secured and comfortable. The positive impact
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43
44 of the new type of banking is also seen nowadays in every sector of rural areas especially in
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46 socio-economic areas. A good number of people are now included in formal banking sector that
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48
has brought a positive change in the rural people livelihood. Moreover, its impact on rural socio-
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50
51 economy especially in employment, business, savings, remittance, agriculture, access to health
52
53 care, education and women empowerment is really good. It can be said that the mobile banking
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56 service would help to eradicating poverty from the country. Now it is necessary for the
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58 government and the regulators to encourage the banks, mobile operators and other financial
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4 service providers to adopt and expand mobile banking as a priority for extending financial
5
6
7 services to a huge number of unbanked people in remote rural areas of Bangladesh. However,
8
9 some people complained that the mobile banking is not secured enough as an agent can do
10
11
12 forgery with the customers. To solve this problem bank authorities discourage to transact money
13
14 through agent account. They suggest to making the transaction by opening personal account. So,
15
16
17 we can say that there is lack of awareness among people regarding the safe transaction. The
18
19 government and bank authorities should conduct campaign to increase the awareness so that
20
21 people make the transaction through their own account. However, another study finds the major
22
23
24 constraints in development of m-banking included operational issues (e.g. security, system
25
26 design, implementation and maintenance); customer misuse of products and services; legal issues
27
28
29 (e.g. without proper legal support, money laundering may be influenced); strategic issues;
30
31 reputation issues (e.g. if the bank fails to provide secure and trouble free m-banking services, this
32
33
34 will cause reputation risk); credit issues and liquidity risks (Islam, 2013). This study was
35
36 conducted in small range in a village only. If the study could be conducted in several villages,
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38
39
more accurate findings would be come. This is a limitation of the study. Future researchers
40
41 would work on how could mobile banking service play role in the economic development of
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43 rural people. They could also find the suitable mobile banking strategy for rural Bangladesh so
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46 that people take benefit from the service and change their livelihoods.
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4 References
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8 Ahmed, B. 2014. The interview was taken for this study in Hatirdia, Narsingdi on 11 November
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10 2014.
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14 Ahmed, M. 2014. “Banking Sebai Biplab: Bishwe Bangladesh Saptam (Revolution in Banking
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16 Service: Bangladesh is the Seventh in the World).” Daily Prothom Alo. 21 October 2014.
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20 Ahammed, M. 2014. The interview was taken for this study in Hatirdia, Narsingdi on 13
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22 November 2014.
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26 Ahmed, S.M. S. et al. 2011. “Problems and prospects of mobile banking in Bangladesh.” Journal
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33 BCG. 2011. “The Socio-Economic Impact of Mobile Financial Services.” Retrieved from Socio-
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33 Jalil, A. 2014. The interview was taken for this study in Hatirdia, Narsingdi on 10 November
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5 Declarations
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7
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9 Ethics approval and consent to participate: Not applicable
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Consent for publication: Consents for publication of personal details were taken from all
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15 interviewees by using a consent form.
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17
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19 Availability of data and material: Transcripts of the interviews taken for this study can be
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21 found at the seminar library of the Department of Communication and Journalism, University of
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24
Chittagong, Bangladesh-4331.
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27 Funding: Not applicable
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