The inclusion of rural and low-income groups in financial services has been a contentious area of long-term struggle for South Asian economies. However, Bangladesh’s utilization of homegrown fintech company “bKash” is fighting this stigma, revolutionizing digital financial inclusion where typical infrastructure is sparse to lift millions out of poverty.

Changing the System

Launched in 2011, bKash entered a market where most of Bangladesh’s population was unbanked and infrastructure was limited. At the time, cash transactions and informal loans were often the only options available. bKash set out with a clear mission: to expand financial access for the country’s low-income majority. The platform allows users to send and receive money, pay bills and top up mobile credit using their phones. It also provides access to microloans — all without needing a bank account, cash, or informal lenders.

The basic financial tools this system offered millions have impacted the reduction of poverty in the nation. The Bangladesh Bank states that services like bKash have helped boost the country’s financial inclusion rate from less than 50% in 2017 to more than 65% by 2022. The app has increased financial connections between economic centers and the rural majority, leading to a growing trend of urban-to-rural remittance and greater involvement of middle-income investors in agriculture businesses.

Reducing Poverty and Increasing Development

By 2021, the app’s rapid growth had transformed digital finance in Bangladesh. Nearly 45% of people aged 15 and above were making or receiving digital payments. bKash alone had reached 67 million verified users, more than 40% of the country’s population, marking a sharp increase from just 29 million users in 2017. This dramatic growth reflects the platform’s expanding role in national development, particularly providing digital financial inclusion to disconnected rural areas.

The World Bank has especially highlighted bKash’s instrumental role in helping Bangladesh achieve Lower Middle Income Country status in 2015. It also credits bKash with driving progress toward the nation’s 2030 Sustainable Development Goals.

A 2020 report by the Bangladesh Institute of Development Studies (BIDS) further underscores the app’s wide-ranging impact. It highlights that digital financial services like bKash have directly contributed to increased household incomes, improved financial transparency and enhanced access to credit. By creating reliable financial records, bKash has enabled many users to become credit-worthy in the eyes of formal lenders, unlocking pathways to business growth, education and health care and setting the stage for sustainable, long-term poverty alleviation.

During the COVID-19 pandemic, the Bangladeshi government expanded the importance of bKash national infrastructure and relief, leveraging the platform to distribute emergency funds directly to vulnerable and isolated groups. This further highlights the ability of digital financial services to transcend low economic activity and restricted mobility, ensuring that income reaches recipients efficiently and securely.

Looking Ahead

Despite its transformative impact, mobile banking in Bangladesh still faces challenges, chief among them a digital gender gap of women significantly less likely to own phones or access mobile internet. This disparity prevents many women from accessing the full benefits of the growing mobile banking infrastructure. Bridging the gap through targeted education, digital literacy and affordable mobile access is essential to achieving financial inclusion.

As Bangladesh advances, platforms like bKash will remain powerful tools for empowering the impoverished, building financial resilience and driving inclusive, sustainable growth, even in the most remote areas. With the growing use of smartphones nationwide, bKash will remain especially necessary for providing digital financial inclusion to those unable to access traditional services.

– Thomas Finighan

Thomas is based in London, UK and focuses on Business and Technology for The Borgen Project.

Photo: Flickr