A recent survey conducted by the Policy Research Institute of Bangladesh highlights that approximately 84% of cottage, micro, small, and medium enterprises (CMSMEs) in the country do not possess bank accounts due to limited awareness and a lack of necessary documents. The study titled ‘Use of Digital Financial Services among Households and Firms’ further reveals that the few CMSMEs with bank accounts are predominantly located in urban and semi-urban areas. The report suggests that despite the high interest rates of around 23-24%, rural households and CMSMEs rely heavily on microfinance institutions for loans due to complexities in accessing bank loans. However, there is significant potential for digital financial services to replace microfinance institutions as a financing source in the rural economy, with formal financial institutions offering lower interest rates. The findings emphasize the need for increased financial support and inclusion in the rural economy, presenting an opportunity for growth. Efforts should be made to expand agent banking, enhance digital literacy, improve connectivity, strengthen security protocols, and foster trust in the agent banking model.
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