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BRAC Bank’s success story of digital remittance has been featured in the case study of United Nations Capital Development Fund (UNCDF).
The study titled ‘Shifting from cash to digital remittances during the pandemic: A case study of BRAC Bank in Bangladesh’ sheds light on how digital service becomes financially inclusive and socio-economically empowering, BRAC Bank said in a statement.
The case study published in UNCDF Blog provides insights and evolving dynamics of remittance market and how it impacts the socio-economic fabric of the country, which received US$ 22 billion remittance annually.
The Covid-19 pandemic led to increased use of digital remittances. When the pandemic broke out in early 2020, there were concerns that remittances in Bangladesh would decline, which would negatively impact the economy, specifically the well-being of migrant recipient families. While remittances to low- and middle-income countries around the world did fall by 1.6 per cent in 2020, the opposite effect occurred in Bangladesh, where inbound remittances increased by 18 per cent, UNCDF found out.
“From 2019 to 2020, BRAC Bank Limited remittance transactions that were received digitally, in either a bank account or mobile wallet, increased from 37 per cent to 75 per cent. Digital transfers are not just cheaper, faster and safer than cash remittances. They also enable smaller, more frequent transactions. As many as 86 per cent of transactions received through bKash mobile wallets are under $200, compared to 30 per cent of those received in a bank account and 19 per cent received in cash,” it added.
Earlier, BRAC Bank partnered with UNCDF to improve Bangladeshi remittance recipients’ access to digital channels and to strengthen the use of remittance-linked, value-added services. To kick off the research collaboration, the two organizations conducted institutional and data mapping, completed a detailed market scan of Bangladesh’s remittance market and analysed 3.8 million transaction records covering 800,000 international remittance customers.
After the launch of their partnership in May 2020, BRAC Bank, with the support of UNCDF investments, scaled existing digital remittance delivery channels such as bank direct credit and bKash mobile wallet.
The recent shift from cash to digital remittance channels in Bangladesh offers opportunities to promote broad-spectrum financial inclusion through remittance-linked financial services such as domestic payments, deposits, savings and insurance. Digitisation may also support remittance use cases such as spending remittances on education, health or utility bill payments. The BRAC Bank and UNCDF partnership is further exploring the addition of such value-added services.
BRAC Bank MD and CEO Selim RF Hussain said, “We are very honoured that our digital remittance story has been picked up for UNCDF. This proves that good works do not go unnoticed. The recognition will further inspire us to drive more digitalisation in BRAC Bank.”
The details of the case study, authored by UNCDF’s Houle Cao, Robin Gravesteijn and Premasis Mukherjee, can be read in this link: https://migrantmoney.uncdf.org/case-study-of-brac-bank-in-bangladesh.
