Financial Inclusion in Rural Bangladesh: The Impact of Mobile Financial Services on the Underbanked Population

Abstract

The growth of Mobile Financial Services (MFS) is becoming more popular now as a tool for increasing access to financial services in the developing countries including Bangladesh. This paper evaluates the roles of MFS in empowering the unbanked especially in rural areas, while investigating its impact on reducing gender disparities and addressing demographic differences in financial inclusion. Participants from both rural and urban areas were surveyed through personal interviews from Savar Upazila, Dhaka, with a total 404 head participants. To considerable hypotheses about MFS usage and its impact on financial incorporation, one sample t-test, two sample t-test and chi-square test were employed. Findings reveal that MFS has enhanced the provision of financial mobile services among the rural folks. Nevertheless, the level of MFS usage is significantly higher among people who were previously enrolled with formal banks, which proves that MFS in a way is integrated into the conventional financial systems. While MFS has improved financial inclusion for women, significant gender disparities persist, requiring targeted initiatives to close the gap. The study proves that the MFS has played a vital role in enhancing the financial inclusion. Further research is essential to address the technological gaps and other demographic barriers to maximize the potential of mobile financial services in promoting inclusive economic growth.