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Interview

Mobile Financing for All

Nagad has become a prominent Mobile Financial Service (MFS) provider within a very short time. In a market that was run mostly by one, the entrance of Nagad shook the MFS market. The founder and Managing Director of Nagad, Tanvir A Mishuk reflects on how Nagad will be doing more for the people of Bangladesh.

Nagad has become a force in the MFS sector thanks to its MD, Tanvir Mishuk. Photographer: Eivan Sardar

CHANGING THE MFS GAME
Already, it is well-established that Nagad is the fastest growing mobile financial service in the world and is revolutionizing digital finance in the country by bringing the marginalized and unbanked population under structured finance. With its innovative solutions, like the digital KYC system, MFS account-opening in the country has become easier and hassle-free, which is helping the customers avail such services and accelerated financial inclusion.
According to the World Bank’s Global Findex 2017, only 50 percent of Bangladeshis were under financial inclusion as of 2017, of which a big chunk had only mobile money accounts. That leaves a large population of unbanked people in need of reliable services to meet their financial needs.

Financial inclusion through the MFS industry has grown to 50 percent after Nagad started its journey in 2019. Nagad has acquired more than 54 million accounts, and, on average, BDT 700 crore ($83 million) is transacted through the platform every day. Evidently, the service has brought more people into financial service.
Among the MFS operators, Nagad has pioneered in digitalization of the government’s fund distribution under the Prime Minister’s Eid gifts for the people who lost their job during the coronavirus pandemic, and disbursement of the social safety net allowance, primary student’s stipends, and Covid-19 cash support. Nagad has distributed about BDT 10,000 crore, or more than a billion US dollars, among 30 million people in the last one year. Through this process, Nagad also helped the government to digitalize the cash disbursement procedure, which ensured extra transparency and accuracy of the project.

Nagad has established a vast network of 243,000 entrepreneurs (agents) across the country, ensuring the presence of our service. Users also can pay all the utility bills without any extra charges, send money without any cost, and encash the sum at the lowest rate in the country.

All these efforts have empowered the customers to avail and enjoy financial flexibility like they had never. This is particularly true for the marginalized population, who have become a part of formal financing and are enjoying the advantages of the system Moreover, Nagad is a mobile financial product of Bangladesh Post Office, and the common people have huge trust in government agencies.

Nagad has established a vast network of 243,000 entrepreneurs (agents) across the country, ensuring the presence of our service. Users also can pay all the utility bills without any extra charges, send money without any cost, and encash the sum at the lowest rate in the country.

SUPPORTING NRBS
Nagad has already taken huge preparations to ease the remittance sending process to Bangladesh and is just awaiting the regulator’s approval. Within a short span of time, the service will hit the market. We hope it will also create a massive difference with other carriers.
We have taken huge preparations for it, partnering with so many international companies and putting in place state-of-the-art technologies like the internet of things and artificial intelligence. Nagad is planning to create a buzz in the remittance market.

I also can assure you that with our wider network across the country and the lowest charges, expatriates will also love to use our service. This will help their near and dear ones to get the sum without any extra effort and will save their valuable time and money.

POLICIES FOR GLOBALIZATION
The government policies play a big role for any industry in the country and fintechs are no different. The government’s vision of Digital Bangladesh has played a key role for the fintechs to grow and evolve in recent years.
At the same time, some policies have also created worries among the fintechs or MFS operators in recent times. For example, the government move to increase the corporate tax to 40 percent from the previous 32 percent for the MFS operators was a big jolt for the industry. The fintech industry in the country is still in the growth stage, and such tax barriers will only hamper the potential of the industry. Also, it affects the customers when it comes to availing cost-effective services, which would ultimately put a dent on the financial inclusion and its sustainability.

A friendly tax regime and policies that help set up and operate fintechs would really aid the industry in growing and serving the nation better. The government is formulating a policy for setting up digital banks, and with such policies, the fintechs would be able to take their services to the next level. Some big names like Australia, Singapore, Malaysia, India, Pakistan, Vietnam, Japan, Iran, and Solomon Island have shown their interest to replicate Nagad’s business model. Last year, they showed their interests at a summit of the Asia Pacific Postal Union, a regional body of the postal departments of 32 member countries, which termed Nagad as the fastest growing digital financial service in the world.
Nagad has introduced innovative solutions that changed the digital payment landscape of Bangladesh. For example, Nagad pioneered the electronic-Know Your Customer (e-KYC) process to ease the account-opening process and reduce the cost of doing business. When Nagad developed the process, it had faced criticism from the existing players. But within a few months, the process got popular and the companies who had earlier opposed the process embraced it and reduced their cost of doing business. Most banks are now using the process to open accounts, a task that earlier took about a week and involved a process of filling up a form running several pages.

Nagad being popular at all levels

As most of the users do not have a smartphone and cannot access the e-KYC facilities, Nagad’s team developed a new facility in partnership with mobile phone carriers so that a basic phone users can also avail the same facilities to open an account. Under this innovation, any Bangladeshi with a mobile phone can open a Nagad account in just a few seconds by dialling *167# from their mobile phones and setting up a personal identification number.
Currently, Nagad is closely working with the government to make the entire government fund and allowance disbursement digital. Already a significant portion of the government’s social safety net allowance and other allowances is disbursed through Nagad.

The next big thing for Nagad would be launching the first-ever digital bank in Bangladesh. The government is working on the policies and guidelines related to digital banks. Once the permissions are issued, Nagad will once again change the digital payment landscape with its digital banking services.
We can change the whole ecosystem of the financial industry by offering the easiest banking solution. All financial transactions will be available through mobile phones and people’s digital life will be ensured.

THE ROADSHOW IMPACT
Such roadshows are an excellent platform to showcase our country and the possibilities of our companies. The capital market roadshow in the USA recently gave us the opportunity to present to the world a dynamic Bangladesh that has enormous potential. The government’s vision of Digital Bangladesh has now become a reality. Thanks to such events, the world gets to know about it.

As a fintech company, Nagad, also in line with the government vision of Digital Bangladesh, is working towards making the life of the people easier with its solutions on financial services. During the roadshow, Nagad was also able to showcase itself and provide an insight into what the company has done so far and what are the untapped potential in the market. That ultimately helped avail a $30 million investment from a US-based company. And the Bangladesh Securities and Exchange Commission has already approved a proposal of Nagad to issue a bond to encash such investments.

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