WSBI, Bank of Asia workshop brings world together to Dhaka to solve pressing societal challenge
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DHAKA, Bangladesh, 2 October 2018 (Updated 9 October with images) – More than 50 banking leaders from nine countries throughout Asia today descended on Dhaka to take part in a special three-day event to focus on widening more access to basic financial services for people living in rural areas.
Hosted by Bank Asia Limited and WSBI – the World Savings and Retail Banking Institute – the gathering of savings and retail bankers explores how to address real-world challenges facing rural finance, such as how to best embed financial services in different ways in people's lives. The workshop serves as an occasion for participants to exchange their national approach in 'last mile financial inclusion' and share insight on their respective institutions' efforts. Alternative distribution channels are an important way to achieve last-mile success. Better use of agent banking can help banks connect even closer to people in cities and countryside alike. Leveraging big data from other sources can 'bank' more unbanked who historically lack credit profiles.
“We are proud of sharing Bank Asia's experience in rural finance with peers from the WSBI network. I hope that banks taking part can gain more insight into our practice of how best to create the products and services that help people become more connected to their communities and local economies too, especially in often hard-to-reach rural areas," said Bank Asia Limited President and Managing Director Mr. Mohammed Arfan Ali, who gave the opening remarks.
Image right: NABARD India General Manager Mr KV Rao shared multi-stakeholder approach to rural financial inclusion
Day 1 of the workshop was inaugurated by Bangladesh Bank Governor Mr. Fazle Kabir, who leads the country's central bank. A session focused on agent banking and product desgin and a field visit are scheduled for tomorrow and Thursday. The Day 2 exchange and Day 3 visit should help participating banks improve overall know-how of rural finance. These learning-focused activities will take a closer look at financial products for rural micro entrepreneurs as well as cross exchange on agent banking among the three countries: Bangladesh, Indonesia and Malaysia.
Defining rural financial inclusion
The International Labour Organization refers to rural finance as the provision of financial services in rural areas that supports a wide range of economic activities and households of various income levels. It includes financial services that support agricultural as well as nonagricultural activities.
Image left: Former Bangladesh Central Bank Governor Dr. Atiur Rahman (standing) spoke at the workshop about financial inclusion in Bangladesh
Rural finance is much more complex than SMEs financing, as the clientele pattern is diversified. Rural population has groups that earn income in different sectors, very smallscale business, informal employment, farming, etc. Providing financial services in rural areas is an indeed challenge as agriculture and other rural economic activities have unique characteristics of dependence on natural resources, long production cycles and vulnerabilityto multiple risks.
Data illustrate the challenges banks face in bridging the access gap for marginalised groups such as those living in rural areas. Rural financial inclusion, or 'last mile financial inclusion', faces challenging obstacles, including:
Lagging availability and accessibility of basic financial services in some rural areas with low population density.
Lack of basic infrastructure which is a prerequisite to set up a financial service touch point.
Unavailability and high cost of financing for micro-enterprises remains a common challenge in rural areas for most countries.
Feminisation of farming as men leave for the big cities in search of greener pastures and higher pay checks.
PT. Bank Tabungan Negara (Persero) Vice President Mr. Ferry Sipahutar, who serves as Chair of the WSBI Working Group on Rural Financial Inclusion, concluded: “Rural areas are still cash dominant. Bringing the illiterate rural villagers to formal financial system and comforting them to use the service, is costly. It should be joint efforts by different local stakeholders."
About Bank Asia
Bank Asia has been launched by a group of successful entrepreneurs with recognized standing in the society. The management of the Bank consists of a team led by senior bankers with decades of experience in national and international markets. The senior management team is ably supported by a group of professionals many of whom have exposure in the international market. It set milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka, first in the banking history of Bangladesh. It again repeated the performance by acquiring the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank. In the year 2003 the Bank again came to the limelight with over-subscription of the Initial Public Offering of the shares of the Bank, which was a record (55 times) in our capital market's history and its shares commands respectable premium.
The asset and liability growth has been remarkable. Bank Asia has been actively participating in the local money market as well as foreign currency market without exposing the Bank to vulnerable positions. The Bank's investment in Treasury Bills and other securities went up noticeably opening up opportunities for enhancing income in the context of a regime of gradual interest rate decline. Bank Asia Limited started its service with a vision to serve people with modern and innovative banking products and services at affordable charge. Being parallel to the cutting edge technology the Bank is offering online banking with added delivery channels like ATM, Tele-banking, SMS and Net Banking. And as part of the bank's commitment to provide all modern and value added banking service in keeping with the very best standard in a globalize world. Learn more about Bank Asia at http://www.bankasia-bd.com.
Origins of WSBI Rural Financial Inclusion Workshop
The first WSBI Workshop on Rural Financial Inclusion, hosted last year by the Postal Savings Bank of China, concluded that challenges in rural finance are enormous while progress is continuing thanks to efforts by government and financial institutions and the advancement in digitalization.
Financial inclusion has been part of the agenda of a number of policymakers at international level, such as the G20, the Universal Financial Access 2020 initiative by the World Bank, to name a few. WSBI and its members have a long history and tradition of serving all segments of the population and they remain as key players in financial inclusion.