BRAC is one of the largest development organizations in the world, with over 100,000 employees worldwide. It strives to alleviate poverty through empowerment and creating opportunities for the poor. BRAC works on many different fronts in order to combat issues of poverty: focusing on empowerment of women and farmers, grassroots organization, health, education, inclusive financial services, and self-sustainment. The organization began as the Bangladesh Rehabilitation Assistance Committee (BRAC) in 1972 to provide relief and rehabilitation following the end of Bangladesh’s War of Liberation. Over the last decade, the organization has extended its work beyond Bangladesh to 11 additional countries. The main values of the organization are innovation, integrity, inclusion and effectiveness.
Definition of Problem
In developing countries across the world, digital financial service platforms (i.e. provision of some mix of financial and payment services delivered and managed using mobile or web technologies) have emerged as an important enabler in providing financial access to low-income groups by offering convenient and secure transactions across geographies. BRAC’s development programs, serving approximately 110 million clients across Bangladesh, engage in a large amount of financial transactions between the organization and its clients. Building these digital service platforms into delivery models could thus have many long-term, positive benefits for BRAC. For an organization operating at its scale, cashless transactions could also lead to significant management efficiency gains. However, digital financial services are far from the norm at BRAC, partly because mobile money is a relatively new concept in Bangladesh and partly due to the lack of clarity on the value digital financial services could add to BRAC.
However, growth of digital financial service providers and their extensive networks of agents over the past few years have created opportunities for BRAC to utilize these platforms. Several BRAC programs have initiated or are in the process of rolling out pilots that incorporate mobile money components using these services. Results have been mixed, with some common challenges including commercial viability of these models, and the difficulties of switching to a cashless system. There is, however, sufficient scope for BRAC to incorporate this technology and design more effective and efficient delivery models for its programs. Going forward, if more programs adopt this technology, there is likely to be system-wide change across the organization in terms of how we design projects. It will be useful if they could keep in mind some of the issues BRAC has faced in using digital financial service platforms, so the end product is something we can realistically take into account as we plan projects in the future. Ideally we would like to see a broader look at what works in the area of digital financial services, suggestions on what BRAC could do going forward (based on experiences of other organizations), what things we need to consider for projects such as this, and how we can evaluate our success.
Initial Steps and Options
- Explore Gates Foundation’s strategy for digital financial services for the poor (available on their website)
- Explore bKash (the first mobile money provider in Bangladesh, and a BRAC investment)