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Financial inclusion is defined as the process of ensuring timely and adequate access to financial services at an affordable cost. The primary idea behind financial access is to provide the rural people with credit and other financial services so that they can raise their income levels and improve their living standards (Khalily, 2004). Extending access to finance, especially for the unbanked rural population, can therefore be a building block towards economic growth and poverty alleviation.
In line with this notion, a vision for universal financial access was first announced by the World Bank Group President Jim Yong Kim at the 2013 World Bank Group-IMF Annual Meetings (The World Bank, 2017b). Following this, some 700 million people gained access to financial services between the years 2011 and 2014. Despite this progress towards financial inclusion, global statistics revealed that an estimated 2 billion adults universally do not have access to basic bank accounts (The World Bank, 2016). Lack of enough money, barriers to account-opening, long distance from a financial service provider, lack of necessary documentation papers, lack of trust in financial service providers, and religion have been cited as key reasons behind the exclusion of people from the formal financial system. Later, the World Bank Group with their public and private sector partners issued numeric commitments to achieve Universal Financial Access by 2020 (UFA2020) and help promote financial inclusion. The UFA2020 envisions that people worldwide will have access to a transaction account or an electronic instrument to store money, send payments and receive deposits as a basic amenity to manage their financial lives (The World Bank, 2017b). In other words, it is an enabler and a catalyst for global financial inclusion and aims to provide financial access to all unbanked people across the world. In fact, it is stated to end extreme poverty by 2030 and boost shared prosperity for the bottom 40 percent of the population in all developing countries (World Bank Group, 2015).
As part of UFA2020, the World Bank Group has invested in a number of innovative projects across 25 priority countries and is working in more than 100 countries globally to advance financial access and inclusion (The World Bank, 2017b). One such focus of the World Bank Group is Bangladesh, a developing country in South-East Asia. A glance at the recent information and communication technologies (ICT) like internet and mobile banking already affirms the progress towards greater financial access in Bangladesh. With an aim to contribute to global financial inclusion under UFA2020, Bangladesh has currently initiated an agent-based financial service system, namely agent banking. This latest ICT project of Bangladesh is specifically known to target the country’s unbanked population in rural areas. While the success of mobile financial services is well-documented (e.g. Islam and Tareq, 2017; Iqbal et al., 2017; Lee et al., 2017; Nisha et al., 2015; Van der Boor et al., 2014), the effectiveness of this new banking channel in the rural areas of Bangladesh still remains a question.