Mobile Banking in Bangladesh: An Opportunity with Constraints?

Photo Credit: Farhana Kabir

Digital financial services (DFS), particularly mobile banking, have the potential to extend financial services to unbanked populations.[1] Specifically, DFS reduce direct and indirect transaction costs. Mobile banking allows clients to access bank accounts, save money, and send and receive payments directly from their mobile phones, eliminating travel to a physical bank. Additionally, mobile banking reduces social or administrative constraints—such as in-person meetings and paperwork, and safety concerns while travelling with money—which can be especially salient for women.

This blog post uses baseline data collected as part of an ongoing randomized controlled trial to report on the opportunity presented by mobile banking in Bangladesh. Our baseline survey shows that mobile banking is not reaching unbanked women.[2] Our data also show, however, that women hold positive perceptions regarding mobile banking, despite acknowledged constraints. These positive attitudes, in tandem with our intervention targeting key constraints, point to an opportunity to meaningfully improve women’s financial inclusion.

Figure 1: Banking and Mobile Banking Account Ownership

Notes: Panel A in this figure reports means of variables indicating traditional banking account ownership, mobile banking account ownership, and no bank account ownership in our sample. Panel B splits the respondents by traditional bank account ownership and shows the share who reports mobile bank account ownership by the status of owning a traditional banking account.

Figure 1 reports on shares of traditional bank account and mobile bank account ownership in our sample. Panel A demonstrates that six out of ten respondents have a traditional bank account, nearly five out of ten have a mobile bank account, and one out of four do not have any bank account. Panel B further investigates the share of mobile bank account ownership by respondents who have a traditional bank account. Those with a traditional bank account are 19 percentage points more likely to have a mobile bank account than those who lack a traditional bank account.[3]  This shows that, at least on average, mobile banking is not necessarily a substitute for traditional banking. Moreover, mobile banking is not yet reaching women without a traditional bank account.

We also asked respondents to report their attitudes about the trustworthiness and safety of mobile banking. Attitudes are tricky to measure. A typical approach asks respondents to indicate how much they agree or disagree with a given statement using a Likert scale. Previous research finds, however, that responses to these types of survey questions can be sensitive to the framing of the statement. With this in mind, we designed two versions of survey questions measuring attitudes—one with a positively framed statement and the second with a negatively framed statement.

For example, a positively framed statement is, “Mobile banking is trustworthy,” and the corresponding negatively framed statement is, “Mobile banking is not trustworthy.” Respondents were asked to respond using the following Likert scale: “completely agree,” “agree,” “neutral,” “disagree,” and “completely disagree.”

Figure 2 reports responses to these survey questions and shows that the framing of these statements does influence how respondents answer. When framed positively, 85% of respondents either agree or completely agree that mobile banking is trustworthy. However, when framed negatively, only 67% of respondents either disagree or completely disagree that mobile banking is not trustworthy. Although in both cases, most of our respondents seem to indicate that mobile banking is trustworthy, the difference in framing leads to an 18 percentage point difference in responses.[4] These large differences in responses based on statement framing represent an important area for future research, given the popularity of using surveys to assess respondents’ attitudes or feelings.

Figure 2: Attitudes on the use of Mobile Banking

Notes: This figure reports the share of respondents indicating “completely agree” or “agree” for positively framed statements and “completely disagree” or “disagree” for negatively framed statements.

Nevertheless, the results reported in Figure 2 are clear—most respondents feel that mobile banking is both trustworthy and safe. More respondents indicate that mobile banking is safer for transferring rather than for saving money, but in both cases and (regardless of framing) most respondents feel that mobile banking is safe. This is important as attitudes can represent a powerful constraint on adopting and using new technology.

So, what are the constraints on the use of mobile banking? Roughly half of our respondents—53% of those in the positive framing group and 45% of those in the negative framing group—indicate that mobile banking is too expensive. Depending on framing, between 29% and 50% of respondents indicate that mobile banking is hard to use. Finally, between 29% and 39% of respondents report that mobile banking is not for someone like themselves, indicating a perceived lack of self-value.

This information is important for our study, which randomizes the provision of (i) subsidies on the use of mobile banking (i.e., addressing the “too expensive” constraint) and (ii) assistance on how to open a mobile banking account with guidance on how to use mobile banking (i.e., addressing the “hard to use” constraint). These findings from our baseline survey demonstrate that most women see mobile banking as both trustworthy and safe, despite the acknowledged constraints on expanded use. These findings, therefore, highlight that our intervention might meaningfully improve women’s financial inclusion.


[1] Unbanked populations are those that lack access to traditional financial services.

[2] Over 99% of respondents are female.

[3] All reported differences are statistically significant at conventional levels.

[4] Ibid.

Jeffrey R. Bloem Research Fellow at the International Food Policy Research Institute (IFPRI). Khandker Wahedur Rahman is a Visiting Research Fellow at the BRAC Institute of Governance and Development (BIGD) and a Postdoctoral Researcher at the University of Oxford