Agent banking in Bangladesh: Strong expansion, some inclusion
This study analyses the rapid expansion of agent banking in Bangladesh, showing increased rural access and reduced dominance of major cities, though growth may now be slowing. Despite wider outreach, lending remains limited and gender gaps persist, highlighting the need to shift policy focus towards deeper financial intermediation and inclusion.
-
Rahman-Majid-Anabil-Munem-Policy-Brief-March-2026.pdf
PDF document • 1.14 MB
- This study examines the expansion and spatial distribution of agent banking in Bangladesh using a newly constructed outlet-level dataset. Since its introduction in 2013, the network has grown rapidly, from 2,601 outlets in 2016 to over 21,000 by 2024, but recent data suggest that this phase of rapid expansion may be approaching a saturation point.
- Agent banking has helped reduce the primacy of Dhaka-Chittagong observed within the traditional banking architecture. For instance, in traditional banking, 78% of loans are disbursed from Dhaka-Chittagong; for agent banking, these two cities only account for 11% of loans. The network has also developed a rural footprint, with far more outlets per capita in rural areas than in cities.
- Despite this expansion in access, credit delivery remains limited. As of December 2024, about two-thirds of agent banking outlets did not have any outstanding loans, indicating that the network functions primarily as a platform for mobilising deposits rather than lending.
- The gender profile of agent banking reveals a mixed picture: women are increasingly participating as customers, with female account growth outpacing male accounts in recent years, yet over 92% of agent operators are male, highlighting a significant gender gap.
- As outlet expansion slows, policy attention should shift from expanding the network to strengthening financial intermediation. Priorities include encouraging agent-based lending and leveraging technology to empower agents to effectively reach the underbanked and underserved.