Thursday | 16 January 2025 | Reg No- 06
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Thursday | 16 January 2025 | Epaper

Financial Literacy Day focuses on customers’ awareness

Published : Monday, 4 March, 2024 at 12:00 AM  Count : 1209
M A Masum
Today 4th March, Monday is the "Financial Literacy Day". Different banks and financial institutions of the country 2nd time will celebrate a "Financial Literacy Day" arranging various activities to raise customers awareness and impart knowledge on financial matters and services.  Bangladesh Bank already issued "Financial Literacy Guidelines" on 27 March 2022 and declared "Financial Literacy Day" will be celebrated on the First Monday of March in every year. Bangladesh Bank is prioritizing a number of initiatives to promote financial inclusion henceforth inclusive economic growth. As a priority focus, BB has identified Strengthen financial literacy & financial education initiatives as an important core objective in its Strategic Plan for 2020-2024.  

It is imperative that all the people shall have proper knowledge on financial management to make rational financial planning for future or unexpected happening. This behavioral change can be influenced through general literacy on key financial issues. This strategic focus thus adequately addressing the deliberation of conceptual leanings on some financial issues such as: savings, borrowing or payments that can help the impactful financial decision of the individual and reinforce the financial ecosystem. Financial Literacy Month is recognized annually in Canada in November, and National Financial Literacy Month was recognized in the United States in April 2004, in an effort to highlight the importance of financial literacy and teach citizens how to establish and maintain healthy financial habits.

The countrys financial system has made significant progress in the last two decades. Traditional banking has changed to digital banking. Financial services have really come to the hands of customers due to internet and technology based services. Bangladesh has been progressing, financial services process has also been improving simultaneously. Implementation of sustainable and inclusive banking sector in line with sustainable economic development is very much important at this stage. In recent years, the concept of financial inclusion has been widely discussed in the developing countries of the world, especially in banking sector of Bangladesh

Agent banking has emerged as a pivotal solution in extending financial services to the unbanked and under-banked population in Bangladesh. The economic landscape of rural areas is changing rapidly as the number of customers and transactions are constantly increasing due to agent banking. Agent banking is one of the most crucial catalysts of financial inclusion in Bangladesh. It offers financial services to the underserved and unbanked across the country through agent outlets. This plays a significant role in boosting the national economy; especially in rural areas. Since its inception in 2013, agent banking has garnered enviable response from the banking community with its high growth potentials.
 
In recent years, the government has taken various steps to bring low income people and rural communities under the banking sector in Bangladesh. As part of financial inclusion, poor farmers have been given opportunities to open bank account for 10 taka only. In this process, money distribution of various social security programs of the government, destitute freedom fighters, small life insurance recipients, unemployed youth, cleaners, garment workers, very poor beneficiaries, very poor women beneficiaries, beneficiaries of National Service Program, people who have received grants for the rehabilitation of the poor from the Ministry of Religion are also encouraged to open bank accounts.  

The mobile financial services (MFS) are growing faster in Bangladesh than its global low- and middle-income counterparts, driven by peoples widespread adoption of handset-based solutions in the absence of their active participation in traditional banking channels. The countrys registered mobile money accounts grew year-on-year by 16 percent to 21.77 crore in October 2023 from 18.75 crore in the previous year, as per the latest data from the Bangladesh Bank.

Despite its push for financial inclusion, Bangladesh has remained one of the top seven countries with a sizeable part of the population unbanked, according to a Work Bank survey. About 30 million of its nearly 170 million people still do not have an account with a financial institution or mobile money platform. Of the worlds 1.4 billion unbanked population, over half or 740 million comes from seven economies, including China, India, Pakistan and Bangladesh, according to the report. About 53 per cent of the adult population in Bangladesh had an account in 2021, up from 50 per cent in 2017, when the preceding World Bank report was published.

Financial literacy is essential in supporting financial inclusion, especially in the context of the advancement of Digital Financial Services (DFS). At present, most of the private banks activities are concentrated in urban areas, leaving most of the rural people out of its reach. In order to bring all the marginalized groups of the country under the bank, a wide public awareness has to be created. By diversifying the flow of money, the involvement of the rural population should be increased, which will have a positive impact on the macro economy. Agent banking activities should be increased to expand banking services at the village level. And for this reason more importance should be given on financial literacy. Bangladesh government has undertaken and is implementing multifaceted programs to make the country smart. In short, it will not make sense to build up a Smart Bangladesh by keeping a large number of population out of financial channels.

The writer is Senior Principal Officer of Islami Bank Bangladesh PLC



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