Bangladesh a Silicon Valley of pro-poor financial innovation: Dr. Atiur

Bangladesh has been the Silicon Valley of pro-poor financial innovation, embracing and empowering the people at the base of the pyramid, mostly through bottom-up experimentations, Former Bangladesh Bank Governor Dr. Atiur Rahman said on Thursday.
The former BB governor made the remarks while sharing his experiences in financial inclusion and inclusive growth in Bangladesh’s perspective in a seminar at the International Monetary Fund (IMF) headquarters in Washington DC on Thursday, according to a press release.
Director of IMF for Asia and Pacific Dr. Changyong Rhee presided over the seminar.
While addressing the seminar, Dr. Rahman argued that Bangladesh’s existing social cohesion and broad-based empowerment owes a great deal to the innovative financial inclusion campaign driven by Bangladesh Bank.
He also praised the government for providing this space for innovation by giving highest emphasis on digitisation.
Indeed, he said, this policy move for faster digitisation has been democratising and enhancing efficiency and inclusion of financial services. The central bank’s campaign for financial inclusion complemented with the core objective of government’s SDGs, which focuses on the notion of none should be left behind.
“In addition to supporting inclusive growth strategy based on labor-intensive manufacturing, agriculture, and remittances, this drive for financial inclusion of Bangladesh Bank together with cheaper health and social solution helped improve the human development indicators of the country. All this have led to faster reduction of poverty and enhancement in life expectancy,” Atiur added.
He said agriculture added more value to a great extent due to financial inclusion. Additionally, it helped minimise income inequality. The mobile financial service, encouraged and regulated by the central bank, further boosted quality of financial inclusion.
Atiur mentioned that targeted credit to SMEs also pushed the growth of smaller rural economic units in recent years. All this have been effecting deeper structural transformation of Bangladesh economy, which is witnessing a number of critical transitions.
“Given these initial gains, Bangladesh is now moving towards a national strategy of financial inclusion. This strategy aims at developing ecosystem where all actors, private and public, can work together to include the excluded, minimise the marginalisation and vulnerabilities, and leverage the technology for developing efficient delivery system,” Atiur said.
He said the government and central bank of Bangladesh have already built the technology infrastructure, connecting the “first and last mile” financial inclusion with delivery of various public goods, mostly through digital payment system. A virtuous cycle of innovation (in terms of products, distribution channels, and payment system), demand and trust has already been put in motion through desired regulatory framework. Now the challenge is how to leverage the digitisation strategically for enhancing efficiency, reducing market gaps, and ensuring price discovery, the press release.
Dr. Rahman invited multilateral financial institution like IMF to conduct research and process documentation for understanding the impact of financial studies on the macroeconomic stability and social cohesion.
Bangladesh is currently undergoing critical transitions in the areas of urbanisation, industrialisation, demographics, and technologies, which are in-turn creating various social and other related tensions, Dr. Rahman opined, adding “Bangladesh should further enhance its drive for financial inclusion for navigating domestic and external shocks.”
Dr. Rhee, the chair of the seminar, appreciated former Governor for his ‘out of box ‘policy interventions, not only in the arena of financial inclusion, but also for maintaining stunning macroeconomic stability in Bangladesh, during his tenure, the press release said.