Loan disbursement through agent banking outlets rose by a massive 41.27 percent year-on-year as of in March this year mainly due to easy loan processing, low transaction cost and lower interest rates.
The countrys 15,835 agents banking outlets handed over Tk 16,482.5 crore loans as of March this year, up from Tk 11,667 crore in March last year, according to Bangladesh Banks January-March quarterly report on agent banking.
A senior banker overseeing agent banking in Bangladesh credited the growth to simple operating system. " Customers do not need to visit a bank branch which is far away to avail of the loan," he said.
Besides, agent banking delivery channel is also gaining popularity as agent banking deposits posted a 16.52 percent year-on-year growth as of March this year.
Deposits out of 2.2 crore agent banking accounts, around four-fifths belong to people in rural areas as it involves Tk 36,810 crore at the end of March, 2024 up from around Tk 31,641.5 crore in March 2023.
Meanwhile, agent banking accounts received Tk 149,916 crore inward remittances as of March this year, posting a growth of 23 percent year-on-year, and around 90.22 percent of the total went to the rural population.
In January-March quarter, inward remittance by agent banking rose by 4.75 percent over the December 2023 quarter.
The top five banks have established 73.44 percent of the total agent banking outlets as of March 2024, with Dutch-Bangla Bank PLC having the highest number with 6,057 outlets.
Bank Asia PLC has highest number of agent banking accounts, occupying 29.66 percent of the total. Around 38.86 percent of agent banking deposits were made in Islami Bank Bangladesh PLC, the highest among all banks.
In case of lending through agent banking, BRAC Bank PLC topped the list, disbursing 62.02 percent of the loans out of the combined loan of Tk 16,482.5 crore.
Meanwhile, the agent banking outlets loan to deposit ratio -- the percentage of loans an outlet gave in comparison to deposits it received from customers -- has also seen a spike. The loan to deposit ratio in agent banking rose to 44.7 percent in January-March quarter of 2024, up from the previous quarters 42.38 percent.
An increase in loan to deposit ratio compared to last quarter indicates that investment through agent banking outlets is gradually gaining momentum, the central bank report read. However, the ratio is still low, according to industry insiders.
In the first three months of this year, only 22 banks out of 31 distributed loans through agent banking. The low lending to deposit ratio indicates agent banking window is serving banks purpose more on deposit collection than lending.
Again, loan to deposit ratio in rural area was 36.79 percent, which indicates rural people are still getting less loan facilities against their deposits compared to those in urban areas, the report read.
As of March 2024, the number of agent banking outlets reached 21,613 and over four-fifths of them are located in rural areas.
Of agent banking accounts, around 49.71 percent belong to female customers, who have continued to surpass their male counterparts (49.06 percent) in account opening. Some 1.1 crore of the accounts belong to female customers and 1.09 crore to males.
