An Analysis of Mobile Financial Services and Financial Inclusion in Bangladesh

In a short span of time, starting in 2011, mobile financial services (MFSs) have burgeoned in Bangladesh, and elsewhere in the developing world. MFSs have brought about major changes in financial products and institutional structures in the financial services market. The study of Bangladesh’s experience with MFS shows that financial inclusion has greatly improved along with efficiency of provision. This article shows that the probability of using MFSs by a household increases by about 43 per cent if the households have temporary domestic migrant members. Female household heads are less likely to use MFS compared to male household head. Out of 1,588 micro merchants in the sample, around 30 per cent have access to MFSs. Individuals engaged in the non-agriculture sector, those from households with the head having higher education, those from non-poor households and those from urban areas have higher probabilities of MFS use. But more research must be done to design appropriate MFS products for the poor, so that they too can also leverage the benefits of MFSs.