Where brick and mortar banks face a tough time reaching customers, agency banking provides the answer -- by delivering the last-mile financial services to the unbanked.

The unique concept has spurred a revolution in retail banking in several underdeveloped and developing countries the world over, creating social entrepreneurs who drive change.

This is also a win-win for all. Agency or "branchless" banking allows banks to expand their geographical presence in a cost-effective way, while customers gain from access to regulated financial institutions and agents benefit financially.

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In Bangladesh, the role of agency banking got magnified during the pandemic and the consequent lockdown. All the stakeholders -- the banks, their agents and the underserved population benefitted from doorstep banking.

"Through us, a number of people in the villages now deposit their savings in banks rather than local NGOs," said Md Firoze, an agent based in Tangail's Mirzapur.

In fact, banks benefit from customers' money as the funds they lend come from deposits. And agency banking fuelled the growth of many banks in the past two years, according to figures available with UNB.

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"During the first wave of Covid-19 last year, I disbursed over Tk 67 crore inward remittances to beneficiaries in Mirzapur through the outlet of a private sector bank," he said, adding that adhering to all bank rules "is the biggest challenge".

While access to financial resources during the Covid-induced lockdown gave several families the ability to absorb the shock, many banks literally thrived and witnessed substantial growth even during the world's greatest crisis.

The managing director and CEO of state-owned Agrani Bank, Muhammad Shams-Ul Islam, told UNB that the bank reported trillion-taka deposits during the pandemic, all thanks to agency banking.

"Our inward remittance growth was 42% as we performed well in disbursing the money to beneficiaries in rural areas through our agent banking network," he said.

"Agency banking is very cost-effective for banks, given the cost for operating a physical branch in remote areas. Also, they played a key role during a crisis like Covid by allowing people to carry out financial transactions," Islam said.

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Agrani Bank is currently operating 400 agent outlets across the country and plans to sanction another 250 such agents.

According to Bangladesh Bank's (BB) quarterly statement, agent banking in Bangladesh has continued to grow in all dimensions amid the pandemic. And this growth has been phenomenal in rural Bangladesh.

A total of 12,205,358 accounts have been opened by agents, of which 5,675,329 or 46.50% accounts belong to women and 52.55% to men. And over 86% account holders are rural residents and the remaining are from urban areas.

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The total amount of deposits stand at Tk 20,379.28 crore (till June 2021), of which 76.01% has been accumulated from rural areas.

Through agency banking, the loan disbursement figure stood at Tk 3186.28 crore while the inward remittance distribution figure stood at Tk 67,954.04 crore till June this year, the BB statement said.

According to the BB data, 28 banks are currently operating through 12,912 agents. The number of agents grew by 4.59% and the number of outlets also grew by 4.41% in the June quarter.

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As of June 2021, the top five banks opened 79.25% of the total agent outlets. Bank Asia occupies the top spot, with some 4,667 outlets.