Bill & Melinda Gates Foundation

Mobile Money in Bangladesh: Shifting from Scale to Innovation

June 18, 2014

“Only 500? Why not 10, 000? Why not all over the country?”

Fazle Abed, BRAC’s founder and chairperson responded when Shahid Ullah told him about the bKash agents that BRAC had just finished recruiting.

BRAC, a Bangladesh-based organization working in 11 countries in health, education, financial services, and more, was no stranger to taking radical ideas to scale.  In 2001, it opened a bank to address the “missing middle” of financial services for small and medium enterprises.

Yet in 2012, over 70% of Bangladesh remained unbanked. Since cell phone ownership was widespread and growing, many saw mobile money as a strategy to greatly expand financial access. BRAC bank invested in bKash and received one of the first licenses to start providing services. Shahid, a veteran staff of the BRAC Microfinance Programme, ran the initiative to recruit the first bKash agents, who would offer clients services.

This was an arduous task. Reflecting on their initial efforts, Shahid shared:

“We decided to start recruiting from our small and medium enterprise borrowers, as they were entrepreneurs and had good marketing skills. We picked people who were already familiar with buying and selling mobile airtime for others. But still, people just couldn’t believe how money could be transferred on air. Money that they could not see, paper receipts that they could not touch....people told me I was crazy! I got one borrower to pay his [loan] installment through bKash and I told him;--I’ve got your payment, I’m telling you, you have a message on your mobile phone, you know you can trust us.”

In some areas, BRAC even asked clients to repay their loans via bKash to build up some faith in the system.  Eventually, 500 brave individuals were recruited to become bKash agents. Mission accomplished, Shahid thought. Until he spoke with Abed.

“I realized he was right, to get agents all over the country was to be able to reach clients everywhere --if we could do it in 19 districts then we could do it in all of Bangladesh’s 64 districts. What Sir Abed realized that I didn’t was that you need just two things to ensure that a thing sells: quality and distribution.”

Leveraging BRAC’s client network, Shahid recruited over 5,000 of bKash’s first agents. As Lynn Eisenhart wrote last week, bKash now has over 80,000 agents and is the second largest mobile money company in the world, in terms of individual accounts. Just two years later, it’s hard to imagine what it must have felt like for Shahid and those early entrepreneurs willing to give this crazy “transferring money by air” idea a shot.

With bKash now the default for sending money from person to person (P2P), BRAC can continue to support increasing adoption of mobile money in ways that help the poor in Bangladesh. With the support of the Gates Foundation, BRAC launched an innovation fund for mobile money and recently announced 7 ways BRAC will innovate with mobile money this year. Selected initiatives include launching a mobile-based savings product for adolescents, offering micro-insurance to microfinance clients, and flexible payment schemes for school fees.

To learn more about BRAC, click here. To learn more about the Gates Foundation's Financial Services for the Poor Strategy, click here.

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