Part of our series on financial inclusion around the world: the story behind each initiative, what works, and what doesn't.

The scene

A garment worker receives her salary on a phone instead of in cash, then sends part of it home to her village through a neighbourhood agent.

In bustling Dhaka intersections and quiet rural market towns alike, small storefronts bearing pink and orange signage have become the physical anchor of digital finance. Customers step up to local shopkeepers not just to buy provisions or airtime, but to deposit cash, settle utility bills, or receive remittances from family members working miles away.

The story behind it

• By the mid-2000s, mobile financial services had taken off in places like Kenya and the Philippines. Bangladesh decided to follow, and bKash launched in 2011 in a market where most people were unbanked and infrastructure was limited.
• The contrast with M-Pesa: the regulator, Bangladesh Bank, set the framework, and the early model was bank-led rather than telecom-led. In 2011, Bangladesh Bank issued the Mobile Financial Services (MFS) Regulations, requiring mobile financial platforms to operate as subsidiaries of scheduled banks—initially starting with BRAC Bank's backing of bKash—which shaped a bank-governed competitive landscape distinct from purely telecom-driven models.
• Agent banking was added as a separate channel: Bangladesh Bank issued agent banking guidelines in December 2013 to bring limited banking services to underserved people.

How it works, in plain language

• An adult can open a mobile financial services account with a provider at an agent point or bank branch, using a photo and legal identification.
• Accounts support transfers, bill payments, merchant payments and salary disbursement.
• Unlike smartphone applications requiring mobile data, Unstructured Supplementary Service Data (USSD) access allows users to interact with financial menus via a simple dial-code on basic feature phones. USSD matters profoundly for low-income and rural users because it ensures universal accessibility without requiring expensive smartphones or active internet connections.

What worked

• Reach: bKash reports more than 350,000 agents and 900,000 merchants (company figures). Across the whole sector, regulator data cited by Transparency International Bangladesh counts about 1.83 million agents.
• Crisis delivery: during the Covid-19 pandemic, countrywide financial support was distributed solely through mobile money, which pushed mobile account ownership up sharply.
• Benefits for the excluded: researchers note women and people below the poverty line have especially benefited. For instance, digital wage disbursement in the readymade garment sector gave female workers direct control over their earnings, enhancing household financial security and independence.

What didn't, or is still unresolved

• Concentration: the market is dominated by two players, bKash and Nagad, with bKash holding the largest share.
• Oversight gaps: a Transparency International Bangladesh study points to limited on-site inspection capacity, a shortage of technically skilled staff, and friction in online e-KYC forms.
• Who is still left out: a digital gender gap (women are significantly less likely to own phones or access mobile internet) and an education gap in account ownership.
• Accounts versus real use: the same report indicates only a portion of accounts are active. According to Bangladesh Bank data cited in governance studies, active account utilization hovers around 40 to 50 percent of total registered accounts.

The view from the ground

• Agent economics rely heavily on daily cash and float management, with local shopkeepers earning commissions while navigating liquidity crunches during peak salary disbursements, maintaining deep personal trust within their communities.
• Users occasionally experience onboarding friction with electronic KYC (e-KYC) verification, while digital fraud, unauthorized PIN sharing, and complex account recovery procedures remain persistent challenges for vulnerable customers.

The India lens

Both countries rely on local agents or business correspondents to reach people who never entered a bank. Compare how identity is verified (Aadhaar e-KYC versus Bangladesh's ID and e-KYC process), how many providers compete, and where grievance redress sits.

In India, the Jan Dhan-Aadhaar-Mobile (JAM) trinity established a public digital infrastructure where identity verification relies heavily on centralized biometric systems, and bank accounts are interoperable across a vast array of apps via UPI. Bangladesh's model, by contrast, grew through private-led mobile financial service providers operating under central bank oversight, relying on national identity databases and bank-subsidiary structures rather than a unified public payments switch.

Grievance redress also diverges significantly. While India utilizes multi-tiered banking ombudsman frameworks and distinct application-level support, Bangladesh's dispute resolution heavily involves provider customer care channels alongside central bank monitoring, highlighting different institutional approaches to consumer protection and regulatory enforcement.

Four questions we ask of every initiative

1. Who drove it? Private providers (initially bank-led) under a central bank framework.
2. How were people onboarded and identified? Photo and legal ID at an agent point or bank branch; e-KYC has caused friction. Digital onboarding relies on national identification databases, though technical drop-offs and biometric authentication challenges often create barriers for illiterate or rural users.
3. Did people keep using it after signing up? Active-account shares indicate that while registration numbers are high, regular transactional use is concentrated among active urban and semi-urban segments, with roughly half of registered accounts remaining dormant or infrequently used.
4. What happened to trust, fraud and complaint handling? Oversight findings highlight that rapid scaling outpaced on-site inspection capacities, leaving consumers vulnerable to social engineering frauds and complex grievance escalation loops.

Sources and further reading

• Transparency International Bangladesh, executive summary on governance challenges in the MFS sector: TI-Bangladesh Report
• BRAC Institute of Governance and Development, "Financial Inclusion in Bangladesh: Scope and Progress": BIGD Study
• FinDev Gateway, "Mobile Financial Services in Bangladesh" (survey of services, regulations and usage): FinDev Gateway Survey
• bKash company profile (company-reported figures): bKash About
• The Borgen Project, "bKash: Digital Financial Inclusion in Rural Bangladesh" (secondary source, cross-check figures): The Borgen Project