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Lending of the banks through agent banking reached a record high in November 2021 amid a number of banks’ move to explore the scope for low-cost lending in the remote areas.
The latest Bangladesh Bank data showed that the banks’ lending through the agent banking channel reached Tk 587.9 crore in November 2021.
The lending was Tk 250.7crore in the same month of the previous year.
The year-on-year lending grew by 134.5 per cent or Tk 337.2 crore in November 2021.
Month-on-month growth was 55.61 per cent or Tk 210.1 crore in November based on the Tk 377.8 crore in lending in October of the year.
Bankers think that the agent banking would subsequently benefit the customers in the remote areas by the way of creating an atmosphere of competition in such areas where microfinance entities are dominating the market.
Though the microfinance entities are charging customers up to 25 per cent interest on loans, there is no other alternative for the rural people to borrow money, they said.
Since the lending rate through agent banking would be same as it is for the banks’ branch-based loans, the low-income people in the rural areas would get scope for borrowing at 9 per cent interest, they said.
Policy Research Institute executive director Ahsan H Mansur told New Age on Monday, ‘Agent banking is bound to be popular and would create competition for the microfinance entities.’
Besides the agent banking, the launching of nano lending of the mobile financial service operator bKash would intensify the market competition, he said.
On December 15, 2021 bKash and The City Bank launched nano lending for bKash customers at the rate of 9 per cent interest.
The competition, however, would benefit the customers and accelerate the financial inclusion, Ahsan said.
Of the banks, lending of BRAC Bank through agent banking window constitutes a major portion.
The bank has been lending through agent banking service since the launch of the service in September 2018, said Mansur, also the chairman of BRAC Bank.
BRAC Bank’s lending through agent banking is more than three times of the amount its mobilisation as deposit through the channel, he said.
Asked whether the bank suffered any major challenge in recovering the loans given through its agent banking channel, he said that the recovery was as like the recovery from the small and medium entrepreneurs and the default rate was insignificant.
The bank’s technology adaptation and capacity to deal with SMEs contributed to tackle the lending through agent banking window smoothly, Ahsan said.
With the record lending in November through ageing banking, total lending reached to Tk 4,963 crore.
Of the 29 banks which operate agent banking, BRAC Bank’s lending was the highest, Tk 2,568 crore, till September 2021, followed by Tk 682 crore in lending of Bank Asia through agent banking, Tk 437 crore of The City Bank, Tk 142 crore of Al-Arafah Islami Bank and Tk 133 crore of Dutch-Bangla Bank.
Apart from the banks, Mutual Trust Bank, Modhumoti Bank, Midland Bank, Islami Bank Bangladesh, NRB Bank and Jamuna Bank have so far disbursed loans through the banking channel while the rest refrained from issuing loans through the agents.
On the other hand, the banks have so far mobilised Tk 23,324.8crore in deposit from the banking channel.
Of the banks, Dutch-Bangla Bank collected highest Tk 3,303.03 crore in deposits through the channel, followed by Tk 3,062 crore of Al-Arafah Islami Bank and Tk 2,893 crore of Bank Asia.
(NA)
