Bangladesh’s agent banking revolution has a paradox at its heart; over the past decade, the country has built one of South Asia’s most extensive agent banking networks over 21,000 outlets stretching from the river deltas of Barishal to the highland fringes of the Chittagong Hill Tracts, twenty-four million accounts have been opened, the majority by people in rural areas who had never held a bank account in their lives.
But a new policy brief by the International Growth Centre (IGC) found that while agent banking in Bangladesh has significantly widened financial access over the past decade, major gaps remain in credit delivery and gender participation.
The study, hosted by the University of Oxford and the London School of Economics and Political Science (LSE) and published recently, analysed more than 21,000 agent banking outlets across the country, offering one of the most comprehensive assessments of the sector to date.
It highlights a ‘strong expansion but incomplete inclusion’ narrative, where outreach has improved markedly but deeper financial intermediation, particularly access to credit remains limited.
The agent banking model was introduced in Bangladesh in 2013 with a clear mandate: to extend financial services to communities beyond the reach of conventional bank branches, reducing operational costs by routing services through local agents. By 2016, the network had 2,601 outlets. By 2024, that figure had surged to over 21,000, a more than eightfold increase in under a decade.
However, the report notes that this rapid physical expansion is beginning to plateau, suggesting the sector may be approaching saturation in terms of outlet growth.
Future progress, it says, will depend more on improving service depth rather than increasing geographic coverage.
Agent banking has also reshaped the country’s financial geography. Unlike traditional banking where Dhaka and Chattogram dominate agent banking has spread more evenly, with rural areas hosting significantly higher outlet density per capita.
Despite these gains, the study flags a critical weakness: limited credit provision. As of December 2024, nearly two-thirds of agent banking outlets had no outstanding loans, indicating that most agents primarily facilitate deposits, withdrawals and remittance services rather than lending.
‘Without access to credit, financial inclusion remains incomplete,’ the report notes, stressing that credit is essential for households to manage economic shocks and invest in income-generating activities.
Although cumulative loan disbursement through agents reached Tk 240.3 billion by 2024, credit growth remains significantly lower than deposit mobilisation, with a loan-to-deposit ratio of 57.3 per cent, indicating a continued gap in financial intermediation.
The so-called ‘zero-loan phenomenon’ is particularly acute in remote and structurally disadvantaged regions, including parts of the Chattogram Hill Tracts, where geographic and infrastructural challenges persist.
The findings confirm that agent banking has developed a strong rural footprint, with significantly more outlets per capita compared to traditional bank branches in rural areas.
Rural deposits have also grown steadily, indicating improved access to formal financial services. However, credit penetration in these areas remains comparatively weak.
The report also finds that agent banking expansion often follows existing banking infrastructure, rather than independently targeting underserved or poorer regions, raising concerns about whether the model is fully addressing financial exclusion.
The study revealed a mixed picture on gender inclusion. While female participation as customers is rising women’s account ownership has been growing faster than men’s in recent years, the supply side remains overwhelmingly male-dominated.
More than 92 per cent of agent operators are men, leaving women significantly underrepresented in the delivery of financial services. This gap is not merely symbolic: female agents have been shown in multiple financial inclusion studies across South Asia to be more effective at reaching female clients in communities where social norms constrain women’s interactions with male service providers. A network that is overwhelmingly male-operated may therefore be structurally limiting its own ability to deepen inclusion among the women it is nominally reaching as customers.
This imbalance, the report suggests, may limit accessibility and trust for female clients in certain communities. With expansion slowing, the IGC urges policymakers to shift focus from scaling the network to strengthening its functionality.
Key recommendations include incentivising banks to extend credit through agent outlets, deploying digital tools for credit scoring and loan processing, and adopting targeted strategies for underserved regions.
The report also calls for stronger efforts to increase female participation in the agent network, including enforcing existing gender inclusion policies.
‘Bangladesh’s agent banking experience reflects strong outreach but incomplete financial deepening,’ the study concludes, adding that the next phase must prioritise equitable and effective financial inclusion.
