Bank Asia and the United Nations Development Programme (UNDP) on Sunday signed a Memorandum of Understanding (MoU) to jointly support easier access to social safety net payments through digital financial inclusion.This new partnership is a ground breaking initiative aimed at bringing financial safety payments and financial services at the doorstep including providing financial literacy, which will specifically benefit village population, said a press release issued by the UNDP.

“In the continuous efforts to reach Bangladesh’s development goals within the Agenda 2030 and the 7th Five-Year Plan, involvement of all sectors, especially the private sector is essential,” said Sudipto Mukerjee, UNDP Bangladesh Country Director.    

“This is a prime example of the private sector designing inclusive business models and services moving beyond corporate banking business. The partnership will expand bank account adoption, consequently accelerating the pathway out of poverty for approximately 10,000 people in the first two years,” said Md.

Arfan Ali, President and Managing Director, Bank Asia.

Bank Asia Chairman A. Rouf Chowdhury said, “Poverty reduction is the core mission of Bank Asia. In line with this our bank has been working all over the country for financial inclusion of unbanked population using its digital banking platform and thus trying to make a tangible turn in the development of national economy.”   

The initial pilot phase of this project will be for a period of one year covering one district. During this period, a research study will be conducted to tailor a mobile application for digital financial services developed by Bank Asia specifically for this target group.

At the community level within the pilot district, the project will ensure that all potential beneficiaries will have information about available services, knowledge on how to use them and understand the benefits of receiving safety net payments through digital services. The pilot district will be selected by Bank Asia and UNDP, during the research phase.

Furthermore, to ensure beneficiaries’ responsible management of financial resources, Bank Asia will invest in the development of the financial literacy training.  This will help specifically rural households to manage their finances in a sustainable manner, and will contribute in improving their chances of getting out of poverty.

The financial literacy training will be complemented by additional financial services such as cash-withdrawal, point-of-sale transactions, micro-credit disbursement.

“At a global level disbursement of safety net payments through digital tools are becoming more and more popular. However, we want to go beyond only facilitating access to services and we want to maximize the long-term impact. With this partnership, we will ensure that people are exposed to financial literacy training, which is expected to impact daily decisions an average family makes when trying to balance a budget for living and livelihood and ensure an income at retirement,” said Sudipto Mukerjee, UNDP Bangladesh Country Director.     Upon successful execution of the pilot phase, Bank Asia and UNDP will jointly explore the opportunities to scale up this initiative nationwide.

The signing of this agreement is yet another example of stretching partnerships between UNDP and private sector under the umbrella of the “Innovation Hub” - an alternative partnership model for Private Sector engagement launched in 2017 by UNDP and the United Nations Volunteer (UNV) Programme.