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Financial Inclusion Leadership and Coordination The case of Bangladesh Khondkar Morshed Millat Deputy General Manager Green Banking and CSR Department Bangladesh Bank E-mail: [email protected] Phone: 88-01715403997
NFIS of Bangladesh: Origin
In Maya Declaration, the joint commitment of Bangladesh Bank, Microcredit Regulatory Authority, and Ministry of Finance spells out Finalization of draft National Financial Inclusion Strategy by 2015.
www.designfreebies.org
Definition of FI Financial Inclusion is to serve the unserved/ underserved/ non privileged /under privileged community under a roadmap actions through public private engagement as agreed at national level for attaining sustainable inclusive growth.
Company Logo
www.designfreebies.org
Financial Inclusion-Objective
Effective broadening and deepening of financial inclusion Integrate public and private sector actions Address different barriers to financial inclusion Facilitate broader financial sector development with a view to: • Poverty reduction • Job creation • Reducing in equality • Food security • Sustainable energy • Product innovation • Introduction of Socially Responsible Financing • Delivery Channel Diversification • Customer protection
Leadership of BB and Coordination BB in coordination and consultation with Ministry of Finance, MRA, Connected Ministries, PKSF, SME Foundation,
Bangladesh Post Office is driving FI as a significant contributor to the national inclusive growth, by extending credit and financial services to the underserved and unbanked population and regions of the country. FI as a major avenue to develop financial structures and deepen the financial sector by strengthening and extending institutions to non-traditional sectors - FI designed and directed to enhance output and reduce uncertainty in Agricultural Production, SME and Green Financing.
Socially Responsible Financing Agricultural Credit
Initiatives
Impact 2008-09
2013-14
Annual Argi. Credit Policy with set target
No credit disbursement by private and foreign banks
All banks disburse credit
Credit Disbursement (Taka in billion)
92.84
160.37
Credit for sharecroppers
Taka 5 billion project was initiated in 2009 to disburse soft bank credit to sharecroppers. Taka 13.28 billion has been disbursed to 0.863 million sharecroppers in last 5 years.
Credit at interest subsidy
In last 4 fiscal years, Taka 3.09 billion bank credit has been disbursed for farming import dependent crops.
Socially Responsible Financing SME Credit
Initiatives
Impact
Credit Disbursement
Taka 2623.40 billion has been disbursed to 1.84 million SME entrepreneurs in last 4 years.
Refinancing
Several refinancing windows from BB’s own fund and support fund by ADB, JICA, IDA have been created amounting to Taka 21 billion. Taka 34.56 billion has been provided as refinance in favor of 41,952 SME businesses from these funds.
Credit for women Credit at interest subsidy
In last 4 years, 90,ooo women SMEs have been provided Taka 94.44 billion from banks and FIs. 15% of the refinance funds has been allotted for women entrepreneurs and 9612 women received refinance facility of Taka 7.54 billion in these period.
Socially Responsible Financing Green Finance
Initiatives
Impact
Green Banking Policy
Green banking policy guidelines were issued in 2011 introducing green finance. In 2014, annual target at 5% for direct green finance has been set banks which will be applicable from 2015.
Credit Disbursement
Taka 941.30 billion has been disbursed from 2012-2014 (September) as green finance where Taka 78.07 billion as direct green finance and Taka 863.22 billion as indirect green finance .
Refinancing
BB initiated revolving refinance scheme of Taka 2 billion in 2009 for renewable energy and green product. The product line of the scheme has been extended to 47 from initial 5. In 2009-10, Taka 5.03 million was disbursed from this scheme where this amount stood upto Taka 381.52 million in 2013-14.
ADB supported Brick Kiln Efficiency Improvement Project
USD 50 million project facilitates financing for environment-friendly brick kiln set up. USD 15.79 million has been disbursed from this project.
Delivery Channel Diversification Initiatives
Impact
Banks and Bank Branches
In last 5 years, 9 banks have been licensed which totals 56 banks at present. Since December 2009, more than 1500 bank branches have been opened. As of June 2014, number of banks branches are 8794, out of which 5022 are rural branches.
Mobile Banking
BB issued guidelines for MFS in 2011. Now, 19 banks are operating mobile banking. Upto September 2014, mobile banking client base is 20.7 million where number of agents are 0.47 million and daily average turnover is Tk. 3.33 billion.
Agent Banking
BB has opened avenue for branchless banking by issuing guidelines on agent banking in December 2013.
Product Innovation Initiatives
Impact
No Frill Account/Basic In last 5 years, BB instructed banks to open deposit accounts Savings Account at very low primary deposit and no service charge in 12 categories including farmers. Now, number of farmers’ accounts are more than 9.72 million and more than 4.59 million accounts have been opened in other categories BB introduced school banking in 2010 for building up savings habit in school goers. Now, accumulated deposit is Taka 6.12 billion in 7,95,000 accounts. BB innovated savings product for street and urchin children in 2014. Refinance Scheme
To engage underserved people in income generating activities, refinance scheme has been initiated in 2014 for NFA holder.
Specific Product for Financial Inclusion Refinance Scheme only for NFA Holders of Tk.10.
Target: Landless/Marginal/Small Farmers/Small Shopkeeper /Micro Entrepreneur/Tailor/Flower and Fruit Sellers /Feriwala/Flexy and IT Service Provides in Rural Area, Carpenter, Plumber, Mechanics etc,etc., helpless people of vulnerable areas,physically challenged, poor women etc.etc. Loan Amount: Tk. 50,000/- Loan Tenor:1 year(Collateral Free) ID/Birth Certificate, Personal Guarantee . This is a Quality Product.
Bank’s offer to borrower 12%, Through Bank-MFI it is 19% BB Refinance Rate to bank 5%, Bank’s Int. Rate to MFI 7%
Customer Protection
Initiatives
Impact
CIPC
A 'Help Desk' was established on March, 2011 which was extended to full-fledged department-FICSD. CIPC is working in all branches of BB including head office and a hotline number has been installed for receiving direct customer complaint.
Policy and instructions
Guidelines for Customer Services & Complaint Management has been issued and instruction has been provided to establish complaint cells in the head office, regional office and branch offices of banks and FIs.
Complain management
Upto June 2014, 10,990 complaints have been received where resolution rate is 98.31%.
FI in Banking Sector: Selected Indicators
2009
2013
Bank branches per 1000 sq.km
48.1
58.9
Bank branches per 100,000 popn
5.1
5.7
No of ATM per 1000 sq.km
8.0
35.55
No of deposit account per 1000 popn
267.3
412.8
No of loan account per 1000 popn
60.2
62.9
Bank sector assets (%GDP)
59.0 (June)
80.0 (Dec)
No of accounts: Conventional (mill.)
37.6 (end 2008)
49.9 (end 2013)
No of accounts: Innovative (mill.) of which farmers 10-taka Account (mill.)
-
13.5 9.7
Farmers getting agricultural credit (mill.)
2.1
3.3
SME (mill. Enterprises, Jan 2010- Mar 2014)
-
1.9
Women enterprises (mill. Enterprises, Jan 2010- Mar 2014)
-
0.9
Monetary Stance of BB for Sustainable Development
CSR-induced financial inclusion programme for under-served sectors to enhance employment, income and output
Twopronged approach of BB’s Monetary Stance
BB’s credit policies, with a distinct “directional bias” to ensure use in productive sectors, for stimulating employment and income
Challenges and Measures to Overcome Challenges: • Funding constraint • Strengthening of coordination between and among the concerned agencies • Prioritizing the targets Measures: • National database needs to be developed • Conducting a comprehensive demand side survey, • Determining targets and indicators, • Developing monitoring and management methodology, • Developing risk management framework, • Developing implementation plan.
LOGO
Financial Inclusion Leadership and Coordination The case of Bangladesh Khondkar Morshed Millat Deputy General Manager Green Banking and CSR Department Bangladesh Bank E-mail: [email protected] Phone: 88-01715403997
NFIS of Bangladesh: Origin
In Maya Declaration, the joint commitment of Bangladesh Bank, Microcredit Regulatory Authority, and Ministry of Finance spells out Finalization of draft National Financial Inclusion Strategy by 2015.
www.designfreebies.org
Definition of FI Financial Inclusion is to serve the unserved/ underserved/ non privileged /under privileged community under a roadmap actions through public private engagement as agreed at national level for attaining sustainable inclusive growth.
Company Logo
www.designfreebies.org
Financial Inclusion-Objective
Effective broadening and deepening of financial inclusion Integrate public and private sector actions Address different barriers to financial inclusion Facilitate broader financial sector development with a view to: • Poverty reduction • Job creation • Reducing in equality • Food security • Sustainable energy • Product innovation • Introduction of Socially Responsible Financing • Delivery Channel Diversification • Customer protection
Leadership of BB and Coordination BB in coordination and consultation with Ministry of Finance, MRA, Connected Ministries, PKSF, SME Foundation,
Bangladesh Post Office is driving FI as a significant contributor to the national inclusive growth, by extending credit and financial services to the underserved and unbanked population and regions of the country. FI as a major avenue to develop financial structures and deepen the financial sector by strengthening and extending institutions to non-traditional sectors - FI designed and directed to enhance output and reduce uncertainty in Agricultural Production, SME and Green Financing.
Socially Responsible Financing Agricultural Credit
Initiatives
Impact 2008-09
2013-14
Annual Argi. Credit Policy with set target
No credit disbursement by private and foreign banks
All banks disburse credit
Credit Disbursement (Taka in billion)
92.84
160.37
Credit for sharecroppers
Taka 5 billion project was initiated in 2009 to disburse soft bank credit to sharecroppers. Taka 13.28 billion has been disbursed to 0.863 million sharecroppers in last 5 years.
Credit at interest subsidy
In last 4 fiscal years, Taka 3.09 billion bank credit has been disbursed for farming import dependent crops.
Socially Responsible Financing SME Credit
Initiatives
Impact
Credit Disbursement
Taka 2623.40 billion has been disbursed to 1.84 million SME entrepreneurs in last 4 years.
Refinancing
Several refinancing windows from BB’s own fund and support fund by ADB, JICA, IDA have been created amounting to Taka 21 billion. Taka 34.56 billion has been provided as refinance in favor of 41,952 SME businesses from these funds.
Credit for women Credit at interest subsidy
In last 4 years, 90,ooo women SMEs have been provided Taka 94.44 billion from banks and FIs. 15% of the refinance funds has been allotted for women entrepreneurs and 9612 women received refinance facility of Taka 7.54 billion in these period.
Socially Responsible Financing Green Finance
Initiatives
Impact
Green Banking Policy
Green banking policy guidelines were issued in 2011 introducing green finance. In 2014, annual target at 5% for direct green finance has been set banks which will be applicable from 2015.
Credit Disbursement
Taka 941.30 billion has been disbursed from 2012-2014 (September) as green finance where Taka 78.07 billion as direct green finance and Taka 863.22 billion as indirect green finance .
Refinancing
BB initiated revolving refinance scheme of Taka 2 billion in 2009 for renewable energy and green product. The product line of the scheme has been extended to 47 from initial 5. In 2009-10, Taka 5.03 million was disbursed from this scheme where this amount stood upto Taka 381.52 million in 2013-14.
ADB supported Brick Kiln Efficiency Improvement Project
USD 50 million project facilitates financing for environment-friendly brick kiln set up. USD 15.79 million has been disbursed from this project.
Delivery Channel Diversification Initiatives
Impact
Banks and Bank Branches
In last 5 years, 9 banks have been licensed which totals 56 banks at present. Since December 2009, more than 1500 bank branches have been opened. As of June 2014, number of banks branches are 8794, out of which 5022 are rural branches.
Mobile Banking
BB issued guidelines for MFS in 2011. Now, 19 banks are operating mobile banking. Upto September 2014, mobile banking client base is 20.7 million where number of agents are 0.47 million and daily average turnover is Tk. 3.33 billion.
Agent Banking
BB has opened avenue for branchless banking by issuing guidelines on agent banking in December 2013.
Product Innovation Initiatives
Impact
No Frill Account/Basic In last 5 years, BB instructed banks to open deposit accounts Savings Account at very low primary deposit and no service charge in 12 categories including farmers. Now, number of farmers’ accounts are more than 9.72 million and more than 4.59 million accounts have been opened in other categories BB introduced school banking in 2010 for building up savings habit in school goers. Now, accumulated deposit is Taka 6.12 billion in 7,95,000 accounts. BB innovated savings product for street and urchin children in 2014. Refinance Scheme
To engage underserved people in income generating activities, refinance scheme has been initiated in 2014 for NFA holder.
Specific Product for Financial Inclusion Refinance Scheme only for NFA Holders of Tk.10.
Target: Landless/Marginal/Small Farmers/Small Shopkeeper /Micro Entrepreneur/Tailor/Flower and Fruit Sellers /Feriwala/Flexy and IT Service Provides in Rural Area, Carpenter, Plumber, Mechanics etc,etc., helpless people of vulnerable areas,physically challenged, poor women etc.etc. Loan Amount: Tk. 50,000/- Loan Tenor:1 year(Collateral Free) ID/Birth Certificate, Personal Guarantee . This is a Quality Product.
Bank’s offer to borrower 12%, Through Bank-MFI it is 19% BB Refinance Rate to bank 5%, Bank’s Int. Rate to MFI 7%
Customer Protection
Initiatives
Impact
CIPC
A 'Help Desk' was established on March, 2011 which was extended to full-fledged department-FICSD. CIPC is working in all branches of BB including head office and a hotline number has been installed for receiving direct customer complaint.
Policy and instructions
Guidelines for Customer Services & Complaint Management has been issued and instruction has been provided to establish complaint cells in the head office, regional office and branch offices of banks and FIs.
Complain management
Upto June 2014, 10,990 complaints have been received where resolution rate is 98.31%.
FI in Banking Sector: Selected Indicators
2009
2013
Bank branches per 1000 sq.km
48.1
58.9
Bank branches per 100,000 popn
5.1
5.7
No of ATM per 1000 sq.km
8.0
35.55
No of deposit account per 1000 popn
267.3
412.8
No of loan account per 1000 popn
60.2
62.9
Bank sector assets (%GDP)
59.0 (June)
80.0 (Dec)
No of accounts: Conventional (mill.)
37.6 (end 2008)
49.9 (end 2013)
No of accounts: Innovative (mill.) of which farmers 10-taka Account (mill.)
-
13.5 9.7
Farmers getting agricultural credit (mill.)
2.1
3.3
SME (mill. Enterprises, Jan 2010- Mar 2014)
-
1.9
Women enterprises (mill. Enterprises, Jan 2010- Mar 2014)
-
0.9
Monetary Stance of BB for Sustainable Development
CSR-induced financial inclusion programme for under-served sectors to enhance employment, income and output
Twopronged approach of BB’s Monetary Stance
BB’s credit policies, with a distinct “directional bias” to ensure use in productive sectors, for stimulating employment and income
Challenges and Measures to Overcome Challenges: • Funding constraint • Strengthening of coordination between and among the concerned agencies • Prioritizing the targets Measures: • National database needs to be developed • Conducting a comprehensive demand side survey, • Determining targets and indicators, • Developing monitoring and management methodology, • Developing risk management framework, • Developing implementation plan.
LOGO
