How Can Digital Finance Help To Reduce Money Transaction Cost And Ultimately Reducing Poverty In Country Like Bangladesh?

Do you know how important expatriates send money to Bangladesh for economic stability? In the growing nation, remittances have become a significant and stable source of foreign funding and wealth generation. Remittances are Bangladesh’s second-largest source of foreign currency earnings, behind only the ready-made garments industry.

However, since a substantial portion of RMG earnings must be expended on raw materials, remittance can be the highest in terms of net revenues. As a result, the role of remittance earnings in the development of the Bangladeshi economy cannot be overstated.

How Has Mobile Finance System Impacted Life Of Individuals In Developing Countries?

Bangladesh has had mobile network operators throughout 1993, utilizing AMPS (Advanced Mobile Phone Service) and subsequently CDMA (Code-Division Multiple Access) innovations. Mobile banking services have been available since September 2011 to send money to Bangladesh online or outside the country, when the central bank of Bangladesh issued a guideline on “Mobile Financial Services for Banks.”

Despite the fact that m-banking is a newer service in the region, it has quickly gained popularity due to the lack of conventional banking facilities. Mobile financial services (MFS) have exploded in popularity in Bangladesh and other developing countries. Financial products and regulatory frameworks in the financial services industry have changed dramatically as a result of MFS. According to a report of Bangladesh’s MFS experience, financial inclusion like online money transfer to Bangladesh from abroad has greatly improved, as has the quality of provision.

What Are The Factors Helpful To Enhance Remittance To Country?

As a result, the role of remittance earnings in the development of the Bangladeshi economy cannot be overstated. The best part of the remittance front in the new year is that Bangladeshi expatriates sent home a total of $15.57 billion in 2018, up to $2.04 billion from 2017, and this growth is nothing if not important. Official remittance figures could look even brighter in the future now that the central bank has improved its surveillance against hundi, as fewer and fewer employees abroad can use illegal channels to transfer their money.

During the first eight months of the fiscal year (FY), 2020-2021, the country’s incoming remittances totaled an estimated 16.69 billion dollars. However, inward remittances totaled $1.78 billion in February 2021, down from more than $1.45 billion in February 2020, indicating that fewer employees abroad will use informal networks for money transfer to Bangladesh.