Bangladesh comes second in financial inclusion in South Asia
A recent study shows that Bangladesh placed second in financial inclusion among the South Asian nations. According to this study, about 66% households of Bangladesh have access to the financial services like credit, savings and insurance. Among south Asian countries, Sri Lanka placed first as 80% of its population is under the financial umbrella while the figure is 48% in India and 60% in Pakistan.
The study was conducted by the Institute of Microfinance. According to the co-author of the study, Micro Finance Institutions (MFIs) has a great contribution to resource mobilization as financial inclusion occurred greatly in Bangladesh. The established top companies of Bangladesh also have contribution to the achievement.
Bangladesh Bank reports that financial inclusion of the population has increased to 56.43% in 2010 from 39.76% in 2004.The study also shows that over 31% of the households have access to saving and credit in formal and quasi-market while 4% have access to both deposits and credit.
The study also found that households pay more for loans from banks than from MFIs as the cost of transaction is 16% in credit market while it is only 9.20% in quasi-formal credit market. According to the executive director of Institute of Microfinance, 50% non-interest cost in the formal market is actually bribing.
However, only 11% of the households have access to insurance services due to the lack of awareness of the service.
The study furthermore hinted that fundamental changes in financial policies and market structure can ensure a sustainable financial system.
The study was conducted by the Institute of Microfinance. According to the co-author of the study, Micro Finance Institutions (MFIs) has a great contribution to resource mobilization as financial inclusion occurred greatly in Bangladesh. The established top companies of Bangladesh also have contribution to the achievement.
Bangladesh Bank reports that financial inclusion of the population has increased to 56.43% in 2010 from 39.76% in 2004.The study also shows that over 31% of the households have access to saving and credit in formal and quasi-market while 4% have access to both deposits and credit.
The study also found that households pay more for loans from banks than from MFIs as the cost of transaction is 16% in credit market while it is only 9.20% in quasi-formal credit market. According to the executive director of Institute of Microfinance, 50% non-interest cost in the formal market is actually bribing.
However, only 11% of the households have access to insurance services due to the lack of awareness of the service.
The study furthermore hinted that fundamental changes in financial policies and market structure can ensure a sustainable financial system.
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