An Empirical Study on Impact of COVID-19 on Mobile Financial Service and Saving Practices: The Case of Bangladesh

Abstract

The world is passing a grievous phase because of a fast-spreading disease named COVID-19. Almost all countries have experienced the impact of coronavirus on their economy. Unexpectedly, due to that situation some industries like retail chain shops, online grocery shops, Mobile financial service, IT firms are experiencing growth in Bangladesh. Mobile financial service is relatively new concept but a fast-growing industry in our country. But there are some issues that MFS users face, especially rural people. History of economics shows that countries that succeeded in accumulating high levels of domestic investment largely financed by domestic savings, achieved faster rates of economic growth and development. So, understanding peoples saving behaviour is crucial. Therefore, this paper focused on finding the impact of COVID-19 on saving practice of mobile financial service users of rural area as economic growth and development depend on a country’s level of domestic savings. To fully understand the situation the researchers aimed to find the answers to some key questions: (1) Did mobile financial service reach to rural people in this pandemic? (2) Did saving rate increased during pandemic? (3) What is the impact of mobile financial service on saving behavior of people? (4) What are the key determinants of saving practices of mobile banking users? Both descriptive and advanced statistical analysis has been used for analyzing the data and a cross sectional survey on user of mobile financial services has been performed. The study area was three subdistricts (Phulbaria, Nandail, Gouripur) of Mymensingh district in Bangladesh. A two-stage sampling technique was used for data collection. First three villages were chosen from the three selected sub-districts. Then, convenient villages were surveyed for collecting information through primary survey. Simple random sampling method has been used in selecting sample and collecting data from the respondent. A total of 210 users was interviewed from the selected areas. Statistical package SPSS was used for data analysis. Researchers found that mobile financial service industry has significantly grown during pandemic but the saving practices of rural people have decreased. Age, occupation, regularity of income, average monthly family income, saving habit, monthly income during pandemic are the significant factors of the saving practices of mobile banking users. The government should encourage rural residents to save more in formal than informal channel and should emphasis on Mobile Financial Service industry as it can be the answer to the economic problem.