How MFS is turbocharging national economy
Since the beginning of its journey in the country in 2011, MFS has become the most vibrant and dependable banking tool with its simple, secure and easy-to-use services
The year 2022 ended with a whiplash on the economic facade of the country. Depleting forex reserves, reports of unprecedented money laundering, lower flow of inward remittance and multiplied cost of a series of development projects have dented the impressive economic performance graph stirring obvious worries.
Adding salt to the wound, prices of almost everything, from fuel to food, from essentials to vanities, have been skyrocketing on the back of Covid-19 pandemic and the far away war between Russia and Ukraine.
Though the economic backlash has been a global issue with almost all countries feeling the brunt of the two-year long life and productivity stalemated by the pandemic and thereafter, the international trade disruptions caused by the war, the situation in Bangladesh had some specific pitfalls which precipitated its economic fallouts.
Over the years, there have been lots of outbursts against malpractices by some banks in the country. There have been allegations as well as proven reports of unethical maneuvering of public deposits including off-shore flight of huge amounts of capital. Loan default has become so chronic that it is now almost an invariable cult of the banking sector, the directors and top management in particular.
Fingers are often pointed at the defaulters but the actual whipping should be done on those who pin the siphoning track. They are the loan sharks, galloping the depositors' money with a 'couldn't care less' attitude. With no punitive measures in sight, the scamsters feel scot free to meet their heinous aims.
Obviously eyebrows were raised at the role and efficiency of the regulator, the Bangladesh Bank. However, nothing tangible came up to discipline the sector and as a result, public trust began to wane. The situation became volatile and much worrying for a greater segment of the population, particularly the middle and lower income groups.
It may not be that all the banks or financial institutions have indulged or engaged in bad practices but one rotten fish can spoil the others in the pond. Truly, the country's banking sector which controls over 80% of economic activities, is in dire straits. Analysts and experts have been crying aloud for quite some time against the anomalies but prudent actions were and still are absent.
This, mixed with miscalculated spending and global economic impacts, has put the country's economy into disarray, at least for now. While international donors may have opened up their coffers to extend financial help to bail out of the morass, these are short term or stop-gap measures.
There must be bold and transparent steps taken by the regulator and competitive authorities to bring back confidence of the en masse depositors as well as the investors.
The abnormalities in the sector are also creating worries for the Bangladeshi expatriates as they have been transferring money to their families through banks. With the abnormalities growing, the informal money transfer sector, better known as hundi, has been very active. This is an insecure domain for the beneficiaries and the government also loses its due dividend from the transactions.
One recent decision by the Bangladesh Bank in allowing the country's mobile financial service (MFS) providers to bring inward remittance is a time-befitting step. Accordingly, MFS providers can channelise wage earners' remittance through their operational domain.
Remittance from Bangladeshis abroad is a vital contributor to the national economy and development. It is next to the lead foreign exchange earner – the export oriented ready-made garments sector. The annual inward remittances from Bangladeshis working abroad, amounting to over $21 billion, have been propelling development across the country.
Besides enabling local infrastructural development in rural areas, remittances made by skilled and unskilled workers are also helping in creating small scale industries and other income generation activities. Most importantly, their remittances are facilitating the creating opportunities for financial inclusion and sustainability.
In no way they should be denied of this value adding opportunity and quite realistically, MFS has been doing the role of modus operandi by dint of its technological alliance with mobile phone operators, ensuring accessibility to all at any corner, thanks to its absolutely simple operational methodology and most importantly, its instant and secure services.
In fact, the mobile financial services (MFS) have been turbocharging the financial capacity of the country. With its unique life saving role during the pandemic and its current transaction of about Tk3,000 crore daily, MFS has become the most vibrant and dependable banking tool.
The industry, which began its journey in 2011, has already proven its worth in monetary transaction efficiency and risk management. With more supportive initiatives, it can effectively gear up the headway to keep the pace of development and sustainability in proper trajectory.
Mohiuddin Babar is the CEO at Bizcare.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.