Managing Mobile Banking to Address the Needs and Protect the Vulnerability of Poor People in Bangladesh

Abstract

Mobile banking places a wide set of financial services – transferring money for savings, investment, paying bills, to relatives – into the palm of a person’s hand. Mobile money transfers have rapidly grown in Kenya, Tanzania, the Philippines, and is set to grow rapidly in Bangladesh in the next few years. Proponents of mobile banking such as the Gates Foundation (2015), World Bank Group President Jim Yong Kim (World Bank 2015), and the G20 report (Klapper and Singer 2014) are claiming that this technology has the potential to make a significant dent in poverty. Regarding the impact on citizens, the G20 report identifies benefits (e.g., lower costs, increased control, and increased women’s empowerment) and challenges (e.g., limited consumer knowledge, customer experience, and gender disparities to mobile phone users) (Klapper and Singer 2014). The report highlights the role of government and business but does not identify the critical role of development practitioners. Moreover, most of the work regarding mobile banking is being undertaken by industry proponents (Duncombe 2012). And new technologies – such as the green revolution, agricultural mechanization, the internet – have had a mixed impact on poor people. Mobile banking’s rapid growth and the mixed poverty alleviation record of other technologies mean that it is essential for development practitioners to engage in planning, implementation and evaluating the impact of mobile banking to ensure it benefits poor people. Development practitioners can play an important role regarding mobile banking to ensure that it meets the needs of poor people, that it builds on their capacities, and that it protects their vulnerabilities.