The Microfinance industry in Bangladesh is growing amidst renewed competition from the banking sector and new agent banking initiatives. As the industry tackles challenges of high cost of borrowings and expansion of business, digitization of transactions is gradually starting to take precedence.
Digitizing transaction has the potential to reduce cost components, increase efficiency and streamline operations, which would allow microfinance institutions to deliver greater value to their clients. Just a 15% increase in transaction digitization would positively affect the lives of close to 4.5 million women borrowers.
Digitization of transactions would not only help microfinance institutions increase efficiency but potentially reduce interest rates and cost of borrowing for its underprivileged borrowers.
This study was produced and published with the support of The Bill & Melinda Gates Foundation and focuses on the current state of digitization and the unexplored opportunities in the microfinance industry.