Comparative Performance Analysis of Mobile Financial Service

in Bangladesh
(A comparative analysis among Bkash, Nagad, Rocket and SureCash)

1
Comparative Performance Analysis of Mobile Financial Service
in Bangladesh
(A comparative analysis among Bkash, Nagad, Rocket and SureCash)

Prepared for
S.M.A Moudud Ahmed
Assistant Professor
Institute of Business Administration (IBA)
Jahangirnagar University

Prepared by
Reazwan Ul Islam
Student ID: 202203051
Institute of Business Administration (IBA)
Jahangirnagar University

Date of Submission: 24th December, 2022.

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 Authorization Letter

10th December, 2022

Rezwan Ul Islam

Student ID- 202203051

WMBA Student Batch- 27

Institute of Business Administration

Jahangirnagar University

Dear Mr. Reazwan Ul Islam,

I Mr. S.M.A. Moudud Ahmed, am writing this authorized letter to Mr. Reazwan
Ul Islam to prepare a business report on “Comparative Performance Analysis of
MFS in Bangladesh”.You have to analyze the performance of mobile financial
service providers in Bangladesh, specifically on the topics of market share,
customer loyalty, customer satisfaction, product and other related topics. The
report must be submitted on 24th December, 2022.

If you have any questions regarding this Authorization please feel free to contact
me through email.I appreciate your assistance about the report and wish you best
of luck.

Regards,

S.M.A Moudud Ahmed

Assistant Professor

Institute of Business Administration

Jahangirnagar University

i
 Acknowledgement

I would like to express my sincere gratitude to all those who helped in the
preparation of this business report. This report would have been impossible
without the contribution and help of several individuals. I am very thankful to
everyone who all supported me, for I have completed my business report
effectively and moreover on time.

I would like to express my heartfelt gratitude to my Professor “Mr. S.M.A.

Moudud Ahmed”, who provided me with the excellent chance to complete this
business report on “Comparative Performance Analysis of MFS in
Bangladesh”, and who also assisted me in finishing my report.

I learned a lot of new things, and I’m grateful for them. I also want to thank my
friend "A K M Arif Uzzaman" who is currently working at EBL Securities Ltd
as a Probationary Officer (Equity Research and Trade) for providing me the
necessary data for completing this report within the time constraints.

Finally, I would like to thank the Almighty Allah, for letting me through all the
difficulties and finishing the report. I also want to express my love for my family
for their continuous support and encouragement.

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 Letter of Transmittal

24th December, 2022

S.M.A Moudud Ahmed

Assistant Professor

Institute of Business Administration (IBA)

Jahangirnagar University

Dear Sir,

Respectfully stating that I Mr. Reazwan Ul Islam student of WMBA Batch-27

has attached the business report regarding ‘Comparative Performance Analysis
of MFS in Bangladesh’ which is a requirement of BUS 501: Managerial
Communication course.

I tried my best to make this report informative. The information of this report is
based on secondary data which is collected from different journals, research
papers, newspapers etc. I would like to thank you for offering me the opportunity
to work on this topic. Thank you for your consideration.

If you have further enquiry concerning additional information, I would be very

pleased to clarify that. Thank you.

Sincerely,

Reazwan Ul Islam

ID- 202203051

iii
 Table of Contents

Authorization Letter ............................................................................................ i

Acknowledgement ...............................................................................................ii

Letter of Transmittal ........................................................................................ iii

Table of Contents ...............................................................................................iv

Executive Summary ............................................................................................ 1

Introduction ......................................................................................................... 2

Origin of the report.......................................................................................... 2

Purpose of the report ....................................................................................... 2

Scope.................................................................................................................. 2

Background ...................................................................................................... 2

Methodology ..................................................................................................... 3

Definitions And Acronyms .............................................................................. 3

Report Preview ................................................................................................. 4

Limitations ........................................................................................................ 4

Overview on Mobile Financial Service in Bangladesh .................................... 5

List of Mobile Financial Services in Bangladesh ............................................. 8

Key market leaders ............................................................................................. 9

Overview on the Market Leader of MFS........................................................ 10

Bkash ............................................................................................................... 10

Nagad .............................................................................................................. 11

Rocket.............................................................................................................. 12

SureCash ......................................................................................................... 13

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Basic Services and charges at a glance............................................................ 14

Limits of Basic Services .................................................................................... 15

Competition landscape of the MFS Industry in Bangladesh ........................ 16

User Number Analysis ...................................................................................... 17

Findings .............................................................................................................. 18

Conclusion.......................................................................................................... 19

References .......................................................................................................... 20

List of Figures

List Name of Figures Page

Figure 1 Active Customers Trend 7

Figure 2 Market Position FY 2022 16

Figure 3 User number of Mobile Financial Service 17

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 Executive Summary

One of the biggest issues facing the world economy is financial technology.
Almost every nation in the world is strangely driven to constantly adopt new
technology in an effort to boost its economy. Every nation's economy is focused
on the banking industry. Therefore, it is very necessary for the banking industry
to go digital. The discovery of the Mobile Financial Services is a result of the
evolution of mobile-based banking or offering business services via mobile. . In
the economy of a developing country like Bangladesh, Mobile financial services
have been growing significantly by focusing primarily in the delivery of the
banking facility (Cash-In, Cash out, Bill payments etc.) to the unbanked
population and this have been the key behind such rapid growth and magnificent
customer acceptance.

In this report I have given an overview about the MFS sector in Bangladesh and
give brief description about the MFS who are leading the market. I have also
analyze the basic services, limitations, competition landscape and user numbers.

This executive summary examines the growth of mobile financial services in

Bangladesh, as well as the key factors driving this growth. It also looks at the
current landscape of the industry, including the key players, their offerings,
market shares and related information.

Overall, mobile financial services have provided a crucial link between the
unbanked and the formal financial system in Bangladesh. This sector has enabled
individuals and businesses to access a range of financial services, reducing the
costs associated with traditional banking services. As the mobile financial service
industry continues to evolve, it is expected to become an even more important
source of financial inclusion for the citizens of Bangladesh.

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 Introduction

Origin of the report

For the completion of this business report I have chosen four MFS, Bkash, Nagad,
Rocket, Surecash who are leading the market and compare their market share,
user number, services and relative information. After reviewing my report
proposal, this report was authorized by Assistant Professor S.M.A. Moudud
Ahmed on 17th December, 2022.

Purpose of the report

The purpose of this report is to show a comparative performance analysis between

the Mobile Financial Service in Bangladesh who are leading the market. The main
purpose of the report is to explore the Mobile Financial Services in Bangladesh.

Scope

This report gives an overview of the Mobile Financial Service in Bangladesh and
analyzes their market share, customer loyalty, customer satisfaction, product and
other related information.

Background

The unprecedented growth of mobile financial services (MFS) in Bangladesh has

significantly contributed to the country’s financial inclusion for the past decade.
Mobile financial services have emerged as a primary financial solution for the
unbanked population of Bangladesh, which is estimated to be around 40 million

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people. The technology-driven mechanism of MFS has enabled a wide range of
services to users, such as cash-in, cash-out, payments, balance inquiry, and the
issuance of digital money. The government of Bangladesh has been a strong
proponent of MFS, recognizing its potential to increase financial inclusion. The
country’s telecom regulator, the Bangladesh Telecommunication Regulatory
Commission (BTRC), has been actively encouraging the adoption of MFS by
providing regulatory support and incentives. The Bangladesh Bank (BB), the
country’s central bank, has been instrumental in driving the success of MFS in
the country. By providing appropriate regulations, BB has enabled a safe and
secure environment for MFS operations.

Methodology

This type of report is exploratory and it is based on secondary data from

publications, research papers, articles, newspapers, magazines, journals, reports,
and regulatory authorities, websites.

Definitions And Acronyms

MFS Mobile Financial Service

BB Bangladesh Bank

BTRC Bangladesh Telecommunication Regulatory

Commission

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Report Preview

In the introduction part we get an overall idea about the whole report, from where
all the information was collected, the process of preparing the report, the
objective, the purpose, the methodology and the limitations of the report.

Then on the overview part, we can get an overview on all the MFS in Bangladesh
and the growth rate of MFS every year. Then we can get information about the
market leader of MFS and their services.

After that we can get information about MFS competition landscape. We will also
able to know about the user number of the MFS.

In conclusion part, we can get information on the findings about the current MFS
situation in Bangladesh.

Limitations

This kind of business report needs accurate data for analysis. Because of
insufficient information it is hard to prepare this type of report. I faced many
constraints when I was preparing the report. The following limitation has been
faced:

 Less information of valid data.

 Organizations did not want to disclose the classified information.
 Didn't find enough data regarding MFS in their websites.
 Went to Banks to collect data but Bank officials were so busy that they
couldn't manage time to provide information.
 Due to time limitations many of the aspects could not be discussed in the
present report.

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 Overview on Mobile Financial Service in Bangladesh

Mobile Financial Services (MFS) is an innovative and widely used service in

Bangladesh that enables customers to access financial services through their
mobile phones. This service has revolutionized the country’s financial sector by
providing a convenient, secure and reliable way to access financial services. It
has also brought more people into the formal banking system, especially those
who were previously excluded from traditional banking services.

MFS is revolutionizing the old financial exchange method, and due to its
affordability and safe medium of transaction, it has gained widespread acceptance
in a relatively short time. Since its beginning, the MFS sector's optimistic
expansion has been aided in Bangladesh by a tech-savvy community, mobile
connectivity, and internet ingress (The Daily Star, 2022).

Mobile financial services (MFS) providers, either bank or non-bank institutions,

are playing a vital role to the financial inclusion in Bangladesh through mobile
banking services. It positively impacts the economy of Bangladesh as a whole.
The mobile banking services introduced in March 31, 2011 in the name of
“Mobile Financial Services (MFS)” with the aim of providing adequate financial
services to the unbanked as well as lower income group people in Bangladesh.
Currently 16 MFS providers are providing mobile financial services to the
customers all over the country through their agents.

MFS offers a wide range of services, including money transfers, bill payments,
airtime top-ups, and mobile banking. It also offers other services such as
international remittances, investment options, insurance products, and savings

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accounts. It has become a preferred choice for many customers due to its
convenience and cost-effectiveness. Additionally, its high level of security and
customer privacy has attracted many customers to use MFS.

They have also made it easier for customers to transfer money from one person
to another. Furthermore, these providers have developed a number of innovative
services such as mobile wallets, mobile payments, and mobile banking.

MFS has contributed significantly to the economic development of Bangladesh

by providing access to financial services to the unbanked and underbanked
population. It has also enabled customers to make payments faster and more
securely. Moreover, it has also helped to improve financial literacy among the
customers, which is essential for the economic development of the country.

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 Figure 1: Active Customers Trend
(Source: Bangladesh Bank)

Customers are using the service for a wide variety of financial operations,
including financial transactions, bill payments, and more (see Figure 1). This
dramatic growth in clientele has allowed MFS to expand its product offerings and
better meet the needs of its customers. Given the bright picture, one could
presume that the firms in this industry are flourishing generating a sustainable
profit.

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 List of Mobile Financial Services in Bangladesh

SL No Name of the MFS Service Name of the Business Entity

1 Rocket Dutch Bangla Bank Ltd.

2 bKash BRAC Bank Limited

3 MYCash Mercantile Bank Ltd.

4 mCash Islami Bank Bangladesh Ltd.

5 Trust Axiata pay: Tap Trust Axiata Digital Ltd.

6 SureCash NCC Bank Limited, First Security Islami

Bank, Bangladesh Commerce Bank, Rupali
Bank
7 EasyCash Prime Bank Limited

8 উপায় (Upay) UCB Fintech Company Ltd.

9 OK Wallet One Bank Ltd.

10 TeleCash Southeast Bank Ltd.

11 Islamic Wallet Al-Arafah Islami Bank Ltd.

12 Nagad Bangladesh Post office (with interim

approval of BB)
13 Tap `n Pay Meghna Bank Ltd.

14 City Wallet The City Bank Limited

15 SPOT CASH Standard Bank Limited

16 Mobile Money Trust Bank

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 Key market leaders

Even though Bangladesh Bank has permitted 18 banks to provide MFS but
currently 16 banks are providing MFS. In this sector, both pioneer and market
leader is bKash Ltd. However, Rocket, SureCash, Nagad are also considered as
key market players.

Service Objective Institutional Advantage

Backing
bKash Mobile Financial BRAC Bank Ltd. Largest Market
Service Share & Network
of Agents
Nagad Digital Financial Post Office Larger
Service Transaction
Limit; Regulatory
Advantage
Rocket Mobile Banking Dutch Bangla Banking Facilities
Bank Ltd.
SureCash Mobile Financial Several local Focused on
Service Banks government
education
programs,
utilities, etc.

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 Overview on the Market Leader of MFS

Bkash

bKash Limited, a subsidiary of BRAC Bank Limited, is considered to be the

leading entity of the MFS industry in Bangladesh. It was launched in July 2011
as a joint venture between Money in Motion LLC and BRAC Bank Limited.
Kamal Quadir and Iqbal Quadir are the two masterminds behind bKash.

Now, bKash has more than 200,000 agents, serving over 50 million verified
accounts all over the country. On Fortune Magazine’s annual list of “Change the
World in 2017”, bKash was featured as one of the top 50 companies bringing
changes regarding social concerns. Furthermore, the MFS provider was awarded
the “Best Brand of Bangladesh” recognition by Bangladesh Bank Forum in 2019
and 2020. In November 2021, as the first Bangladeshi company, bKash’s
valuation became $1 billion.

Initially, Bkash used to offer only three services- Cash In, Cash Out, and Send
Money. However, as time passed, MFS provided by bKash increased
significantly. Now through USSD and the bKash app, the provider offers all sorts
of payments, salary disbursement, loan repayments, Mobile Airtime recharge,
interest against savings, and distribution of foreign remittances, along with all
other essential services.

10
 Nagad

Nagad is defined as a Bangladesh Post Office (BPO) operated Digital Financial

Service, and it is the second largest MFS provider in the country. Nagad was
launched on 26th March 2019 as a joint initiative between Bangladesh Post Office
and Third Wave Technologies Ltd., offering services such Cash-In, Cash-Out,
Mobile Recharge, and Send Money. Now it also provides services including
payment services, EMI payments, Shariah MFS, and interest on savings.

After launch, Nagad also experienced a surge of subscribers. It is the second

company in Bangladesh to reach $1 billion in valuation. As of December 2021,
Nagad had 5.80 crore registered accounts, and it on boarded 3.35 crore customers
in 2021 alone. In the same year, 75% of the government disbursement of social
safety net programs was done through Nagad. In 2022, the MFS provider reached
its milestone of Tk. 1,000 crore transactions in a day.

For showing exceptional growth in just a few years and its contribution to the
financial inclusion goal of the country, Nagad received the Fintech Impact Award
in November 2021. It also won the Digital Marketing Award, Mastercard
Excellence Award, and Global Economics Award in 2021. The Global
Economics also mentioned Nagad as “The World’s Fastest-Growing MFS.”

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 Rocket

Dutch Bangla Bank is known to be the pioneer of mobile banking in Bangladesh.

Rocket, the rebranded version of DBBL’s mobile banking system, was launched
in March 2011. Its primary goal is to reach the unbanked population of the
country with suitable banking services and promote saving up. Along with its
banking services, the MFS provider offers services such as Cash-In, Cash-Out,
payments, mobile recharge, disbursement of salaries, government allowances,
foreign remittances, and the like.

One key difference between Rocket and most other MFS providers is Rocket
considers each account as a deposit, not e-money in an e-wallet. Therefore, the
users are able to receive DBBL’s banking services through Rocket without having
to physically visit the bank. Because of this reason, Rocket’s popularity is
gradually increasing. Its customer base reached 2.66 crores after onboarding 47
lakh new ones in 2021.

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 SureCash

SureCash itself is an open mobile payment platform that was launched in 2010.
It offers a complete payment solution to users and payment partners, including
person-to-person transactions. The MFS provider won the “Award of Excellent”
by Bangladesh Bank as well. SureCash serves 20 million customers nationwide.
The open payment network of SureCash currently includes partnerships with 4
local banks, 1,500 payment partners, and 180,000 retail agents. FSIBL FirstPay
SureCash and Rupali Bank SureCash are the two Bangladesh Bank-approved
MFS providers.

FSIBL FirstPay SureCash started operation in 2014 to make banking technology

convenient to all ranges of people. This mobile service offers fast transactions,
ease of operation, a secured payment system, cash deposits and withdrawals, a
straightforward account opening feature, and affordable fund transfer facilities.

Rupali Bank SureCash started its journey in 2016, and since then, it has been
involved in a number of Government disbursements. The MFS provider now has
a customer base of one crore. It also facilitates utility bill payment, banking
services, money transfers, mobile top-ups, remittance disbursement, shopping,
fee payments to educational institutions, and salary disbursement for many
businesses. Rupali Bank SureCash now has more than 200 distributors and 1.5
lakh agents in the country.

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 Basic Services and charges at a glance
Rocket
General Salary and
Details bKash Nagad SureCash
Consumer Stipend Product*
Product*
At Agent : Free 0.9%
At DBBL
Cash in Free BDT 10 per Free Free
Branches/Fast
transaction
Track : Free
BDT 5 per
Transaction
(Except General
BDT
Consumer
5.00 on
Send Money Product to Salary
every BDT 5 per BDT 4 Per
via & Stipend
Send Transaction Transaction
USSD Product charge
Money
transaction 0.9% on
transaction Per
amount in transaction
USSD & Apps) charge is
BDT. 4
For Apps Free
(Except General
BDT
Consumer
5.00 on
Product to Salary
every
Send Money & Stipend
transaction Free Free
Via App Product charge
of
BDT 501 0.9% on
and above transaction
amount in
USSD & Apps)
BDT 1.85 BDT 1.5 1.8% service
Cash out from
for BDT 1.8% 0.9% for BDT charge of the
agent
100 100 cash-out
Cash out from BDT 1.75 At DBBL At DBBL BDT 1.5 amount.
agent with app for BDT Branches: Branches: 10 per for BDT Minimum
100 0.9% BDT. transaction 100 charge is
BDT. 5
BDT 30.00
Cash out from
for BDT 0.9% Free - -
ATM
2,000
Payment of Bill Varies
(Merchant)/ institution to
Bills: Bills:
Receive institution.
Free BDT. 2 to BDT. BDT 2 to BDT. -
international Minimum
20 or 1% 20 or 1%
remittance etc. charge is
BDT. 4

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 Limits of Basic Services
Services bKash SureCash Rocket

Valid Minimum amount

BDT 10 for agent/Branch
BDT 30,000 and 5 BDT 30,000 and
Cash in and BDT. 30000 for Fast
transactions 5 transactions
Track. Maximum 5 daily
transactions
Send Money via BDT 10 to BDT
USSD 25,000 Valid amount Valid amount BDT. 10 to
BDT. 10 to BDT. 25,000. Maximum 100
BDT 10 to BDT 25,000 BDT. 25,000 transactions
Send Money Via App
and 50 transactions
Valid amount BDT 50 Valid amount
Cash out from agent to BDT 25,000 and 5 BDT 50 to
transactions BDT 25,000 and Valid amount BDT 50 to
BDT 25,000 and 5
Valid amount BDT 50 5 transactions transactions
Cash out from agent
to BDT 25,000 and 5
with app
transactions
Valid amount BDT Valid amount BDT 50 to
Cash out from ATM 2,000 to BDT 25,000 BDT 25,000 and 5
transactions
Transfer Money (MFS Valid amount BDT
to Bank) 10 to BDT 25,000
Payment (Merchant)/ BDT 125,000 and 10 Minimum 20 to any amount.
Receive international transactions Maximum daily transaction
remittance etc. 5

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 Competition landscape of the MFS Industry in Bangladesh

Figure 2: Market Position FY 2022

(Source: BB and BCC)

The Bangladesh Bank has been awarding licenses for MFS in an effort to
integrate those who do not have bank accounts with the formal financial system.
MFS is appealing to government bodies due to its multi-dimensional impacts as
well as revenue-generating methods. Since the industry's inception, the growth of
the MFS sector has been positively influenced by a number of factors, including
the tech-savvy population, mobile connectivity, and internet penetration.
According to the Bangladesh Bank reports, Mobile financial services (MFS) had
a 30 per cent increase in transaction value in FY 2022, rising to Tk9,900 billion
from FY2021's Tk7,595.6 billion (2022).There are 1.53 million MFS agents
located throughout Bangladesh. Top MFS providers are bKash, Nagad, Rocket,
and SureCash with a market share of 39.9 per cent,18.1 per cent and 11.7 per cent
respectively (see, figure 2),

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 User Number Analysis

Figure 3: User number of Mobile Financial Service

According to the most recent figures, there were a total of 33 million active users
of digital payment services in Bangladesh as of December 2020.

Of these, Bkash had the most users with 22 million, followed by Nagad with 8
million, Rocket with 1.5 million, and SureCash with 1 million.

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 Findings

 As per 2017 research, the majority of MFS service users in families (79%)
are men, with female involvement (21%) falling short of expectations.
MFSs are used by people of all educational levels to accomplish their goals.
The most popular MFS service in Bangladeshi homes is money transfers.
Family members mainly transfer money among themselves for family
expenses like shopping and education.
 Mobile payment is the most popular best-preferred service form of MFSs
in households in Bangladesh. Paying Bills, purchasing digital contents and
store items are also made through mobile payment.
 Savings, bills payment and balance inquiry are the most common mobile
banking services taken by the households' users of MFSs in Bangladesh.
 Majority (71%) of the firms are doing business for less than ten years. They
are predominantly in trading and distribution business. The main reasons
to small and medium business firms for using MFSs is to bring more
revenue and more customers to their businesses. Revenue collection and
suppliers' payment are the most frequent transactions incurred through
MFSs in the surveyed small and medium business firms.
 This report highlights the MFS competition landscape and gives an overall
view of the industry.

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 Conclusion

The MFS journey in Bangladesh has been an eventful one, full of successes and
challenges. Since its launch in Bangladesh in 2011, MFS services have rapidly
gained traction and now serve more than 13 million active users and over 30
million registered users in the country.

Dutch Bangla Bank appeared first in March 2011 with its "DBBL Mobile", later
rebranded "Rocket". Brac Bank came second in June 2011 with bKash. One year
later, the duo had only 4 lakh customers. Today MFS operators register Tk 2,300
crore in average daily transactions, employing 11.23 lakh agents. The services
available has grown gradually. Now it is possible to top-up mobiles, pay at shops
and e-commerce platforms, utility bills and various educational institution fees,
transfer money among banks, send remittance, receive education stipends and
many more. (According to The Daily Star).

The success of MFS in Bangladesh can be attributed to the government’s strong

commitment to digital financial inclusion, the strong support of local banks, the
country’s vibrant telecom sector, and the increasing demand for digital financial
services among the rural population. This journey has led to increased financial
inclusion in Bangladesh, improved access to financial services, and enabled
people to make and receive digital payments with ease. As MFS continues to
expand and innovate in Bangladesh, it is poised to have a positive impact on the
country in the years to come.

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 References

ASIF SAAD BIN SHAMS, A. R. S. C. D. H., July 2020. MFS SECTOR OF BANGLADESH

SAFEGUARDING CURRENCY MOBILITY DURING PANDEMIC, s.l.: IDLC Monthly

Business Review.

BD, B. I., September 2022. Top Mobile Financial Services (MFS) Providers in Bangladesh.
[Online]
Available at: https://businessinspection.com.bd/top-mfs-providers-in-
bangladesh/?fbclid=IwAR0HclNhb1cRMIAX3qxg_81IX3_9C2oTLzxUabANXIKpuIrEMU
HFg4SRfB0

Dr. Md. Akhtaruzzaman, D. M. E. I. S. I. S. R. -U.-I. R. U. B. M. T. J. U. P., December 2017.

An Impact Study on Mobile Financial Services (MFSs) in Bangladesh, s.l.: A Joint Research

by Bangladesh Bank and University of Dhaka.

HOQUE, R. T. a. M. E., November 2022. Competition landscape of the MFS Industry in

Bangladesh, s.l.: The Financial Express.

Uddin, S. S., January 2017. Customers‟ Satisfaction of „ROCKET‟ and the Comparison of

its Profitability with Other MBSs in Bangladesh , s.l.: s.n.

Yamin, A. B., April 2018. Mobile Financial Services by Banks: Gearing up for Digital

Bangladesh. ResearchGate.

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