Mobile banking for financial inclusion in a developing economy

Abstract

Recently, financial inclusion has been considered as a priority policy across countries due to its affirmative impacts on countries’ development processes, decreasing extreme poverty, ensuring quality education, improving shared prosperity, and achieving inclusive and sustainable financial system. While the traditional brick-and-mortar banking system is becoming limited in expanding financial inclusion in developing economies, mobile banking is gaining popularity as an alternative banking channel for Bangladesh to take financial products and services to the country’s huge unbanked population in an easy, efficient, and low-cost manner. In other words, mobile banking has much potential and thus is gaining significant momentum in increasing the extent of financial inclusion in Bangladesh. The key purpose of this chapter is to explore whether mobile banking contributes to the financial inclusion of the country. We employed the data of 2014–2018 produced by the World Bank and Bangladesh Bank, the central bank of Bangladesh. Empirical findings indicate that the country’s mobile banking significantly contributes to the improvement of financial inclusion. This outcome also infers that mobile banking impacts the government’s and policymakers’ decision to undertake their policies in terms of innovative channels such as mobile banking along with regulatory frameworks as it is proven to be a catalyst for financial inclusion in a developing economy like Bangladesh.