bKash provides a mobile based platform for convenient, reliable and affordable financial transactions for low-income households in Bangladesh.
Geographic Area of Impact: Bangladesh
Model: Social Business
Number of Direct Beneficiaries: 16 million (2014)
Annual Budget: USD 70 million (2014)
Percentage Earned Revenue: 96% (2014)
The Social Problem
With less than 15% of the population holding a bank account, penetration of the formal banking system in Bangladesh is still extremely low. While this has created a fertile environment for microfinance, there is still little incentive for formal banks to venture out of urban areas, thus preventing rural consumers from accessing a broad range of financial services.
Innovation and Activities
bKash, founded in 2010, provides a mobile platform for financial transactions that are convenient, reliable and affordable. A joint venture between BRAC Bank and Money in Motion, bKash has 16 million registered users, making it the second largest mobile money company in the world in terms of individual accounts. The company offers an efficient system so that people who migrate to urban centers to earn a livelihood can send money home in easy, secure, fast and affordable ways. Many users are also transacting with remote traders or customers – eliminating expensive middlemen thus ensuring better prices; parents send fees to children studying in distant cities, the ultra-poor are receiving financial assistance from donors on time.
Financial inclusion being a key goal, bKash platform has a simple interface that can be accessed by a cheap (USD 15) handset. The company has partnered with multiple mobile providers making the platform accessible to 98% of the country’s mobile users. Further, to keep the platform affordable to its low income users, the company avoids charging fees for registrations or “cash-ins” or a minimum cash-out fee. For person-to-person (P2P) transfers, customers pay a flat fee of USD 0.04 irrespective of the size of the transaction. In case a customer wants to cash-out, there is a flat fee of 1.85% on the amount withdrawn. Many bKash customers deal with small ticket transfers, but their large volume compensates for the apparent small ticket size and contributes to the financial sustainability of the company.
bKash operates through a network of 200 distributors and 110,000 retailers spread across 68,000 villages. The small retailers or “agents”, that include convenience stores, pharmacies and grocery stores, serve as counters where users pay cash to load their phone with an equivalent amount of electronic money. This serves as a lower cost network in comparison to installing a capital-intensive large-scale ATM network.
Kamal Quadir is an established and successful technology entrepreneur. Prior to heading bKash, Kamal created CellBazaar which, after reaching 4 million users, was acquired by the Norwegian telecommunications operator Telenor in 2010. CellBazaar won the Best Use of Mobile for Social and Economic Development Award 2008 from GSM Congress and Asia Telecom's Innovation of the Year 2008 Award. He received the “Tech Award 2007” for “Applying Technology to Benefit Humanity”. Kamal was chosen as a Young Global Leader by the World Economic Forum in 2009 and has won numerous technology awards including the MIT Ideas Award.
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