DHAKA: Bangladesh, home to the world’s second-largest mobile money company, is moving to consolidate the industry as it expands financial services to the rural poor.
The central bank has proposed channeling all mobile transactions through bank-led companies with a minimum capital of 1 billion taka ($13 million), said Bangladesh Bank Governor Atiur Rahman.
This would force smaller providers to merge and link up with banks.
“There are a lot of entrepreneurs who could never be reached by conventional banks,” Rahman said in an interview in Dhaka on Thursday.”It’s a conscious move by the central bank to bring those unserved or underserved into financial flows.”
More of Bangladesh’s 157 million people use mobile phones to transfer money than bank accounts.
The nation — upgraded this year to the World Bank’s low-middle-income status — has a mobile network that covers 99 per cent of its population, and remittances account for more than 10 per cent of its economy.
The central bank has made it mandatory for all banks to give a minimum of 25 per cent of total loans to agriculture.
Farmers can open accounts with as little as 10 taka ($0.13).
The new companies would need to boost capital by retaining at least 10 percent of net profits a year, according to the central bank proposal.
Telecom companies would be allowed to hold stakes of as much as 30 percent in them.
While their main role would be to provide payment services, they can also accept deposits, insurance premiums and disburse loans.
The central bank will finalise the proposal after receiving comments from various stakeholders.
All existing mobile money platforms would need to restructure operations within three years of the proposal being accepted and implemented.
