mfs bangladesh: 2015 highlights

MFS Bangladesh: 2015 Highlights

Gregory Chen & Michelle Kaffenberger

24 June 2016

Data Sources

Financial Inclusion Insights by Intermedia (Demand Side). The primary data source for

this analysis comes from the Financial Inclusion Insights (FII) surveys, conducted by

Intermedia (http://finclusion.org/). FII surveys are annual, nationally representative surveys

conducted in multiple countries: Bangladesh, India, Indonesia, Pakistan, Kenya, Nigeria,

Rwanda, Tanzania, and Uganda. The surveys for Bangladesh were conducted in Sep/Nov

2013, Jun/Aug 2014, and Aug/Sep 2015, each with a nationally representative sample size

of 6,000 adults. Unless otherwise noted, the data presented here comes from the

Financial Inclusion Insights surveys.

Bangladesh Bank Mobile Financial Services (Supply Side). Additional complementary

data is included based on monthly data submitted to Bangladesh Bank by MFS providers.

This data is consolidated and made publicly available on the Bangladesh Bank website at

https://www.bb.org.bd/

2

http://finclusion.org/

https://www.bb.org.bd/

Outline

1. High Level Overview 2013-2015

2. Deeper Dive into Users and Non-Users

3. Airtime Purchases & Advanced Financial Services

4. DBBL Mobile & bKash

3

High Level Overview

2013-20154Photo: Abdul Aziz, 2011 CGAP Photo Contest

2013-2015: MFS steady growthFII demand side data

5

22% 23%

33%

3% 5%

9%19% 18%

24%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015

All mobile money use Registered use Unregistered use only

Surveys: (1) September-November, 2013; (2) June-August, 2014; and (3) August-September, 2015

Adult Use of MFS (%)

2013-2015: MFS steady growthSupply side data from Bangladesh Bank shows similar growth trajectory

6

-

10

20

30

40

50

60

70

80

90

100

110

2013 2014 2015 2016

Mil

lio

ns

MFS Accounts

Registered Accounts Active Accounts

122 Million Adults

* Active is <90 days with one transaction

2013-2015: MFS steady growthBangladesh Bank and bKash data show growth; slowing pace in 2015

7

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

April 2013 toMarch 2014

March 2014 toMarch 2015

March 2015 toMarch 2016

Pace of Growth %

Number of Transactions

Value of Transactions

bKash Annual Growth

of Revenue (%)

2014 81%

2015 50%

Source: BRAC Bank annual reports 2014

& 2015

Source: Bangladesh Bank

How long have you been using MFS?

Unregistered

users

23%

2013-2015: MFS steady growthDemand side also shows slowing pace

0%

5%

10%

15%

20%

25%

More than a year Six months - one year Less than six months

Wallet users Unregistered users

Most users have

been using for

more than a year

Growth is

steady

8

2013-2015: Demand/Supply Data

112m adults

Bangladesh Bank September 2015:

29m registered accounts/112m adults = 26%

12m active accounts/112m adults = 11%

Intermedia FII survey September 2015:

9% of adults with registered account

There is a mismatch in supply side data which counts registered accounts at 26% of adults

whereas demand-side survey data reports 9%.

It is difficult to know precisely why this gap exists, but some part of the explanation may be

individuals with multiple accounts*, dormant accounts and accounts opened which

individuals are not aware of or have forgotten about.

*An individual with accounts with two providers would count once in the demand

side data, but twice in the supply side data. 9

2013-2015: Summary

Looking at demand and supply data:

• Both indicate that growth continues, but at a slowing pace.

• Demand data shows 9% of adults with an account, quite

different than the total supply side reported data indicating

26%.

10

Deeper Dive into Users

and Non-Users11Photo: GMB Akash, 2011 CGAP Photo Contest

Adults Access phone Aware of mobilemoney

Use mobile money Active use

100%

24%

Un-

reg’d

92%

64%

Own

32%

Borrow

18%

Un-

reg’d9%

Registered

8%

Registered

MFS 2015: Use Patterns

19 of 20 access a

phone; 12 of 20

own a phone 9 in 10 adults

aware of MFS

For every

3 aware,

only 1

uses*

Un-reg’d = unregistered use most likely at OTC

Active is defined as using in the past 90 days.

* Ratio of users to those

aware rose to 36% in 2015

up from 25% in 2014/2013

12



100%

24%

Un-

reg’d

92%

64%

Own

32%

Borrow

18%

Un-

reg’d9%

Registered

8%

Registered

Unaware of MFS

8% unaware of MFS: who are they?

13Un-reg’d = unregistered use most likely at OTC


Those Unaware: Also More Vulnerable

30% G2P recipients not aware;

3x average

Own a Phone…10x more likely

than…

Do not own

phone

Men…3x more likely

than…Women

Highly Educated…18x more likely

than…No Education

14

15

1%

2%

3%

3%

4%

4%

4%

6%

7%

8%

9%

9%

11%

14%

18%

31%

0% 5% 10% 15% 20% 25% 30% 35%

Higher education

Secondary education

Have a bank account

Own phone

Men

Urban

Above PPI

Primary education only

Use and MFI

Population

Rural

Below PPI

Women

Borrow phone

No education

No phone use

% in each group who are unaware

Unaware are More Vulnerable

Individuals who do not own a

phone, those with no

education, women, the poor,

and rural residents are most

likely to be unaware of mobile

money.

National average



100%

24%

Un-

reg’d

92%

64%

Own

32%

Borrow

18%

Un-

reg’d9%

Registered

8%

Registered

Aware of MFS

59% of adults

are aware of

MFS but don’t

use. Who are

they and why

the large gap?



Access to Agents Not a Big Barrier

“Nearest agent”…..

• 46% 15 minutes or less

• 30% 15-60 minutes

• 21% do not know

Bangladesh Bank (Sept 2015) 542,400 agents.

Unique agents = 200,000. Dense population, not

many pockets without agents.

17

Trust Not The Major Barrier

Nonusers:

– What is the main reason you have never used mobile

money?

I do not trust that my money is safe: 0%

OTC Users:

– What is the main reason you have not signed up for an

account even though you use mobile money?

I do not trust that my money is safe: 0%

18

19

44%

49%

53%

55%

57%

57%

61%

61%

62%

63%

63%

63%

64%

65%

69%

71%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Higher education

Have a bank account

Men

Own phone

Urban

Above PPI

Use and MFI

Population

No phone use*

Secondary education

Rural

Below PPI

No education

Primary education only

Women

Borrow phone

% in each group who are aware but do NOT use mobile money

Demographics Don’t Explain Much

Small differences

across demographics;

MFS is “democratized”

and accessible to

majority. Explanations

for use and non-use

difficult from survey

data.

*The % of those with no phone access who are aware but do not

use is relatively low because a large % of these are not aware at all.

Users/Non-Users Hard to Discern

Nonusers:

– “What is the main reason you have never used mobile

money?”

Top answer 81% ----- “I do not need it”

20

MFS is accessible but only moderately used.

Beyond this survey data offers limited insights.



100%

24%

Un-

reg’d

92%

64%

Own

32%

Borrow

18%

Un-

reg’d9%

Registered

8%

Registered

Users

Usage patterns among those

that use MFS



MFS Adds to the Financial Sector

22

16%

15%

8%

2%

7%

6%

2%

Use none of the services: 43%

MFI

MFS

Bank

% Adults who use

MFS Lacks Strong Use Cases

Nonusers - What is the main reason you have never used

mobile money?

I do not need it: 81%

OTC Users - What is the main reason you have not signed

up for an account even though you use mobile money?

I do not need it: 22%

Using an account is difficult: 20%

I have all the services I need through an agent: 18%

23

MFS and Phones Linked

Nearly 100%

of registered

users own a

phone

Phone ownership among mobile money users

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Registered users Unregistered users

Own phone Borrow phone No phone access

24

Phone Ownership and G2P

71% of government

welfare recipients do

not own a phone

25

Gender Gap

26

Registered OTC Total

Female 9% 22% 31%

Male 15% 35% 50%

Registered OTC Total

Female 0% 10% 10%

Male 1% 21% 22%

ALL Registered OTC Total

Female 5% 16% 21%

Male 11% 32% 43%

PHONE OWNERS NO PHONE

• Phone ownership triples (31% vs 10%) the likelihood a woman is an MFS user.

• The gender gap is narrower among phone owners, but a gap remains.

Education a Significant Factor

27

2% 5% 8%

24%16%

24%27%

31%

0%

10%

20%

30%

40%

50%

60%

have no education have only primaryeducation

have secondaryeducation

have highereducation

% Use in Each Education Level

Use through registered account Use unregistered

Education linked to

both more use &

more registered use

Deeper Dive Into Users/Non-users: Summary

8% unaware: Tend to come from more vulnerable groups

For other non-users: Awareness, proximity to agents, trust

are not barriers

MFS widely available and accessible, to nearly everyone

Owning a phone and higher education positively correlated

with use, but other demographics are not strongly correlated

Gender gap closes among those who own a phone, but a

gender gap remains

28

Airtime Purchases &

Advanced Financial Services29Photo: GMB Akash, 2011 CGAP Photo Contest

Airtime Purchase

28%

1%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Registered users Unregistered/OTC users

% who have purchased airtime

30

Does Airtime Drive Registered Use?

31

0%

5%

10%

15%

20%

25%

30%

35%

Less than 6months ago

6 months - 1year ago

More than 1year ago

New users are

LESS likely to have

purchased airtime

Registered users:

Why did you start using MFS?

I had to receive money: 55%

I had to send money: 38%

Most start using to conduct

transfers.

% of registered users who have

purchased airtime

Unregistered

users

23%

Advanced services

include: Savings, credit,

insurance, paying bills,

receiving government

benefits, receiving

wages, business uses,

and paying for goods

and services

Advanced Financial Services

10%5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Registered users n=463 Unregistered/OTC users n=1,402

32

Use advanced services

Use only basic services

Super Users

Super users = registered account and least one advanced

service

2.5% of MFS users

1% of adults

Super users: Urban, men, above the poverty index,

higher education

Also: Young, 3X more likely to own a smartphone

(31% vs. 9%)

33

Airtime and Advanced Financial Services:

Summary

Using MFS to purchase airtime is a relatively new service;

primarily used by registered account owners.

There is little evidence to suggest airtime usage drives account

registration; most still register for sending/receiving.

Use of advanced financial services still low; only 1 in 10 are

registered users.

There is a small group of Super Users who tend to be men,

urban, younger, above the poverty index and more likely to own

a smartphone.

34

DBBL Mobile & bKash35Photo: Mohammed Khalid Rayhan, 2011 CGAP Photo Contest

DBBL & bKash

DBBL bKash

36

Market share

30% of Bangladeshi adults have used bKash, while 4%

have used DBBL’s mobile money service.

bKash has significantly more users in every

demographic category.

37

Active use and registered use

bKash users are more likely to be active account holders:

81% are active, compared with 67% of DBBL users.

DBBL users are more likely to be registered: 44% are

registered users, compared with 23% of bKash users.

38

Demographic differences

Among each service’s customers, percentage who are:

39

Women Rural

Below Progress

out of Poverty

Index

None or only

primary

education

Work in

Agriculture

bKash 35% 59% 70% 42% 22%

DBBL 30% 51% 66% 30% 15%

Geographic differences

Fewer bKash customers are concentrated in Dhaka:

36% vs. 43% for DBBL

There are other examples where the regional spread

vary. For example, more of bKash’s customers are in

Chittagong than DBBL’s (17% vs. 9%) and in Barishal

(9% vs. 4%).

40

Advancing financial inclusion to improve the lives of the poor

www.cgap.org 41

http://www.themastercardfoundation.com/

http://www.themastercardfoundation.com/

mfs bangladesh: 2015 highlights

Economy & Finance