Low-income households, women, rural communities, and informal workers remain excluded from financial services due to deep-rooted barriers, even as the government aims to achieve financial inclusion for all adults by June 2026, according to the Bangladesh Bank.
In its Financial Inclusion Report 2024, published last week, the BB states that these barriers stem from both demand- and supply-side factors, limiting access and use of formal financial services and slowing inclusive economic growth.
“These must be addressed to ensure a more equitable, accessible, and resilient financial ecosystem,” the BB said.
The report, however, notes that Bangladesh has seen substantial growth in digital financial services, driven by a 32 percent year-on-year increase in mobile financial services (MFS) transactions, reaching Tk 164,000 crore in 2024.
Agent banking has also expanded, with 85.6 percent of outlets located in rural areas.
The country now has over 4.2 crore microfinance accounts, and microfinance institutions disbursed Tk 262,000 crore in loans during FY2023-24, according to the BB.
Cooperatives, insurance providers, and capital market intermediaries are also contributing to financial inclusion.
Yet many barriers remain. Limited financial literacy, awareness, and digital skills prevent informed use of formal services. Rural populations face restricted smartphone access, poor mobile coverage, and low digital literacy, curbing the adoption of MFS and digital banking.
Besides, the report notes that informal workers and small businesses struggle to access credit or digital payments due to a lack of documentation, collateral, or formal registration. Gender-based exclusion is another problem, it says, adding that women are underrepresented in account ownership and product usage.
As of December 2024, only 37.7 percent of women in Bangladesh owned a bank deposit account. “Socio-cultural norms, mobility restrictions, lack of documentation, limited control over financial resources, male-dominated decision-making and limited ability to use digital tools hinder their access to formal financial services,” the report adds.
According to the report, high dormancy of accounts is another concern, as many accounts -- particularly those opened under social safety net programmes -- are used only once and then remain inactive.
“Despite increased access to basic transaction accounts, formal credit and structured savings remain out of reach for most low-income groups, farmers and micro-entrepreneurs due to structured processes, high costs or lack of tailored products,” it adds.
The report also identified cultural and religious beliefs, reliance on informal lenders, documentation challenges and fear of debt that further discourage engagement with formal financial institutions.
Language barriers also persist, as many financial services remain available only in English and use technical terminology, limiting accessibility for less-educated groups and persons with disabilities.
The report also notes that low income, limited savings, economic uncertainty and a continued reliance on cash-based transactions restrict the transition to formal and digital financial services.
On the supply side, infrastructure gaps and high operational costs constrain service expansion, particularly in remote and disaster-prone areas such as chars, haors, coastal belts and hill tracts.
“Limited integration between banks, MFSPs and payment platforms leads to fragmented financial experiences. Users often maintain multiple accounts to bypass ecosystem limitations, increasing cost and complexity,” reads the report.
It points to inadequate financial inclusion data as another challenge, noting that limited disaggregated data hampers the design of targeted policies.
“The prevalence of a cash-based informal economy reduces the perceived need for formal financial channels,” it states. Despite rising MFS transactions, cash remains the dominant mode of transactions in rural markets and informal trade.
The BB report cites overlapping mandates among financial sector regulators due to fragmented institutional coordination and inadequate use of technology.
“Some financial service providers continue to use legacy IT systems, resulting in slow manual processes. Attempts to deploy interoperable platforms and Bangla QR have seen minimal adoption due to poor usability, limited bank participation and weak promotion,” states the BB.
The report on financial inclusion also blamed financial service providers for their “risk-averse behaviour”.
“Some formal financial institutions remain highly risk-averse, often reluctant to extend credit to small-scale farmers, rural borrowers and low-income customers due to concerns over low profitability, defaults and collateral issues,” it says.
