In the summer of 2011, as BRAC Bank in Bangladesh prepared to launch its mobile money subsidiary bKash, those of us in charge of BRAC’s microfinance operations held a series of discussions about what the advent of mobile money would mean for microfinance generally and for our organization more specifically. In those heady days the excitement about bKash was palpable, but so were our concerns about its immediate impact on our work. We were particularly worried about the possibility that bKash would cannibalize some of our deposits. At the time, customer deposits accounted for over 40 percent of our liabilities, and we worried that if our clients opted to save in their bKash wallets instead of their microfinance accounts, not only would our cost of funds increase significantly, but our asset quality and customer retention might suffer as well. We planned for multiple scenarios, assuming each time that a sizeable hit was sure to come.
Then in August, bKash launched. In the months that followed, bKash set up tens of thousands of agents and signed up millions upon millions of accounts. By the end of its first year the word ‘bKash’ had become a verb in the Bengali language, meaning to send money. And yet, we saw no change in our overall deposit collection or deposit balances. The millions of women living in poverty who saved with us weekly or monthly, were continuing to save at exactly the same rate as before. Granted many of our clients did not have access to a mobile phone to begin with, and many of those who had a phone did not have their own bKash account. However, even for the increasing numbers of people who did have a bKash account, the relative convenience and ease of saving money in their bKash wallet did not prove to be a strong enough incentive to make the switch. They continued to save in our microfinance branches, and with microfinance institutions (MFIs) generally (Bangladeshi regulations allow MFIs to collect deposits from their members).
We realized quickly that our assumption—that what our clients want most is convenience—was wrong. For women living in poverty across Bangladesh, as for women in many parts of the world, among the most important considerations in deciding how and where to save is the ability to protect their savings, mainly from male members of their own family (typically husbands, but often brothers, sons or even fathers). MFIs, which typically make it rather cumbersome to withdraw deposits, were unwittingly providing a service of tremendous value to their female clients – protecting their savings. The ability and ease of “cashing out” anytime was not what most of these women wanted or valued. Quite the contrary.