Sat, 13 August 2022
The Daily Ittefaq

MFS sector led financial transactions during Covid-19 pandemic: Nagad MD

Update : 19 Jul 2022, 22:47

The MFS sector led the country in share of financial transactions during the Covid-19 Pandemic.

Nagad, an MFS provider, has taken the lead in disbursing a variety of government allowances, including Covid-19 financial assistance, stipends, and social safety net program.

The transparent distribution of these allowances has saved time and reduced system losses, the company's Founder and Managing Director Tanvir A Mishuk told in an interview.

Mishuk shared his thoughts after the post-budget period on the country's economy and Mobile Financial Service (MFS).

Tell the current situation of the country's MFS industry

Mishuk: Undoubtedly, the MFS industry plays a significant role in Bangladesh's sustainable growth.

The MFS sector led the country's financial transactions during the Covid-19 Pandemic. Nagad has taken the lead in disbursing a variety of government allowances, including Covid-19 financial assistance, stipends, and social safety net program. The transparent distribution of these allowances has saved time and reduced system losses.

Collectively, all operators currently transact an average of Tk 3,500crore on a daily basis.

When Nagad entered the market in March 2019, the daily transaction of all operators was roughly Tk 1,000. Needless to say, Nagad has been instrumental in market expansion. All of Nagad's unique innovations, in particular, have pushed users to embrace MFS or mobile financialservices.

What stage is Bangladesh's economy now in?

Mishuk: We are at present, in my opinion, in the best position in Bangladesh's history. The way we have handled the Covid-19 crisis is simply exemplary. Even many developed countries have struggled to deal with this predicament.

We constructed Padma Bridge. This bridge will have a significant economic influence not just on Bangladesh but also on a number of neighbouring countries. The forecast indicates that just one bridge will raise our revenue by 1.23 per cent. Followed by the Karnafuli River tunnel, metro rail, and the elevated expressway. Now, the entire world willwitness the progress of the Asian Tigers.

Is financialinclusion satisfactory enough?

Mishuk: Obviously, this is where we lagged behind. However, our initiatives have gotten quite advanced. The Global Findex, the latest study led by the World Bank, indicates that 53 per cent of individuals in Bangladesh are included in the financial inclusion umbrella. However, based on the number of bank accounts and credit cards, it is around 20 per cent. The remainder comes solely from MFS. Without a doubt, Nagad plays a crucial role here.

To ensure the long-term viability of development, we must enhance financial inclusion and swiftly surpass Nepal, India, and Sri Lanka. Mobile financial services will be the primary vehicle for the government to achieve this objective, rather than the traditional banking system.

In this case, Nagad is a model of optimism. In the previous three years alone, our consumer base has grown to almost 6.5 crores. No other business in Bangladesh has gained so many customers so quickly, not even in the banking sector. In the meantime, the daily transaction volume of Nagad has nearly hit one thousand crores.

What are the scopes of work here?

Mishuk: According to The Global Findex, the majority of individuals without a banking account own a mobile phone.

Therefore, we have the potential to bring these unbanked individuals into the fold.

We have not been able to bring 30 million individuals into financial inclusion yet, according to the study. Hence,this is also an opportunity for us to expand the market.

In terms of financial inclusion, Sri Lanka, India, and Nepal are ahead of us, but in the majority of instances, we are in the lead. For example - paying the utility bill through MFS makes Bangladesh the most advanced in South Asia, in this area.

How innovative has this industry been in its expansion of services?

Mishuk: In recent years, the digitalization of the financial sector has been ensured. And this has been

largely accomplished by Nagad. Previously, it was the local Hundi that had been transformed into a formal transaction.

We've introduced an innovation that streamlined the complex procedure of account opening, which is known as D-KYC •167#.

Through this innovation, they can simply dial *167# and open a financial account.

How much can MFS operators contribute to GDP?

Mishuk: So far, no research has been conducted on the MFS sector's contribution to GDP. However, it is a self-evident fact that if transact ions can be accelerated while keeping transparency, the economy can move far more quickly. Additionally, the MFS sector has generated over one million direct and indirect employment. Mobile phone operators contribute 7.5 per cent to GDP. The contribution of the MFS industry to GDP is, in my opinion, more than that of mobile operators.

Source: UNB

 

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