Bangladesh’s banking sector has yet to resolve problems relating to non-performing loans, governance and the soundness of its supervision. But a large population that is still predominantly financially excluded offers local banks enormous potential, as Stefania Palma reports.
In the space of just four years, mobile payments service bKash has had a dramatic effect upon Bangladesh, bringing the unbanked into the formal economy, speeding up and simplifying the process of sending money from urban to rural areas, and even helping the country’s central bank monitor inflation levels. Stefania Palma charts its dramatic rise.
The annual Microscope global report on financial inclusion provides a kind of open-source regulation for fostering the right environment to give everyone access to banking and credit services, wherever they are, writes Michael Schlein, president and chief executive of Accion.
Socially responsible financing continues to play a key role in Bangladesh's financial sector. Focusing on inclusiveness and green funding has allowed the financial inclusion of the poorer segments of the population, while maintaining the country’s economic stability.
Bangladesh's central bank governor, Atiur Rahman, spent an academic career championing the cause of the country's poor. He is now – through the implementation of a number of socially responsible economic policies – putting his theories into practice, and with some success.
The steady growth of sharia-compliant assets suggests banks believe in the future of the sector, but the dismantling of the largest cross-border Islamic window raises questions about whether global banking groups can make a success of the business.
While the Asia-Pacific region's growth story over the past few decades has been powered by Japan and then China, at least as far as banking is concerned, when these two countries are removed from The Banker's Asia-Pacific rankings, it is Australia's banks that come to the fore.
Nobel Peace Prize laureate Professor Mohammed Yunus talks to Kala Rao about the growing role of microfinance in the global economy, the challenges the sector faces moving from the informal to formal status, the need for regulation and the role that governments can play.