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IDLC’s digital savings program for bKash app users to bring Bangladesh’s unbanked population under financial inclusion

IDLC’s specialized digital savings program designed for bKash app users can change the financial habits of the unbanked population.


Bangladesh’s largest non-banking financial institution, IDLC Finance has introduced the country’s first Digital Savings Scheme (Online DPS) in partnership with bKash, the largest MFS platform in the country. Through the initiative, people previously outside of financial inclusion will be able to take advantage of the term deposit services of IDLC Finance via their bKash accounts. Done right, the product can potentially change the financial inclusion landscape of Bangladesh. 

For IDLC, the program opens new doors of opportunities to serve a previously untapped segment of customers. It is possible that IDLC will eventually seek to work with more partners to expand the product. And for bKash, it allows the company to bundle yet another financial service for its users giving them more reasons to stick with bKash.  

What is it? bKash customers can now open savings schemes with IDLC Finance from anywhere, anytime paying monthly installments of BDT 500 to BDT 3,000. The duration of the scheme ranges from a minimum period of two years to a maximum of four years. Multiple accounts can be opened by an individual user. Savings installments can be deposited from the bKash app on a scheduled day every month. Once the savings scheme matures, customers will receive their deposited amount along with profits in their bKash account and cash out for free. 

How it works: To open a savings account in IDLC, click on the 'Savings' icon on the home screen of your bKash app, follow a few simple steps, provide your personal information and details of your nominee, and that’s it, you have a savings account in IDLC.  

Terms and conditions and profits of the savings will follow Bangladesh Bank guidelines.

The savings installments will be automatically transferred from the bKash account to IDLC Finance on a specific date of each month. The customer will be notified before each due date to keep a sufficient balance in the account. 

Customers will be able to see all the important information live on their bKash app, including total savings amount, savings period, and profits. 

When the savings period expires or matures, the customer's deposited money, including profits, will be transferred to their bKash account. If the customer wants to withdraw money prior to the end of the savings period, they can also do so through the bKash app.

What people are saying: In a press release shared with FS, top management of both organizations expressed high hope that the program will help make the lives of common people better and improve the economic freedom of the unbanked population of the country. 

M. Jamal Uddin, MD & CEO of IDLC Finance said, “This collaboration between IDLC Finance and bKash to connect customers with traditional financial services through MFS will serve as an example for the industry. The access to services like monthly savings schemes will also contribute to the improvement of people’s living standards and economic development.” 

Kamal Quadir, CEO of bKash said, “bKash, which has become a part of the lives of millions across the country, has once again utilized technological innovations to make it easier for customers to get access to savings service of financial institutions. To further encourage the savings trend, IDLC's savings service has been brought to the doorsteps of marginalized people to enhance their efficiency and independence in financial management." 

The impacts: The state of savings product penetration remains abysmal in Bangladesh. The situation has been exacerbated by a lack of financial literacy and an absence of a savings mindset, particularly, among low-income and marginalized segments of the population. This negatively impacts the well-being and financial freedom of a large segment of the population.

While MFS services such as bKash have experienced phenomenal penetration across the country, the usage remains limited to peer-to-peer money transfer, payments, etc.  On the other hand, banks and traditional financial institutions don’t enjoy a similar level of penetration. As a result, most people who use MFS services don’t have access to financial products like savings. 

Saving money is a matter of awareness and habit. First, people have to understand the importance of savings for their well-being. Then they have to have options to save and it has to be easy to do so. We now know from research that any behavior change depends on how easy or difficult certain behavior is to perform. 

To that end, the collaboration between IDLC and bKash can be a game-changer for creating new financial habits in people and transforming the entire landscape of financial inclusion. The collaboration will extend financial inclusion to the population who live outside of traditional banking services. It will make saving money easier, safer, profitable, and accessible to people from all walks of life. 

Rima Begum, a resident of Sylhet Sadar and a user of IDLC Online DPS, validates this. Rima has been using the service since August 2020. “I did not have a savings account before because I did not have the opportunity,” says Rima in an interview with FS. “When IDLC offered online DPS through bKash, I found it easily accessible and started saving a small amount each month. It is hassle-free, reminds me before every monthly installment and I can see confirmation when a deposit is made and other information.” Rima says she plans to continue maintaining her monthly deposits and that it has helped her save for the first time in a long time. 

Industry insiders and experts have long predicted that access to bankings services can transform the economic fate of a large number of people. “If we want to include every person in the banking industry with a bank account and transactions and want to attain the middle-income country status then we need an enabler in the banking industry,” explained Muhammad A. (Rumee) Ali, former CEO of Bangladesh International Arbitration Centre (BIAC). “This enabler is fintech and its application on handheld devices. It will create a huge impact on the economy and inclusivity and our GDP will automatically grow. Imagine, if 130 million people out of 160 million get included in the financial system with a bank account and do transactions through the financial system, it will create a huge multiplier effect on the economy.” 

IDLC’s digital savings program for bKash app users has the potential to help change the financial behaviors of a large group of people who don’t currently save regularly and don’t have access to financial services. The eventual result can transform their financial capacity and their ability to invest in education, health, and well-being. If financial institutions want to reach a greater number of people, there is no alternative to handheld devices. Mobile phones can turn into banks, which will ultimately be beneficial for banks as well. 

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