Agent banking: Rural borrowers still get fewer loans against deposits

Lending through agent banking outlets is increasing. However, rural areas are still receiving fewer loans against their deposits than urban areas, reflecting banks’ preference for lending more to people in towns and cities, according to a Bangladesh Bank (BB) report.

At the end of June this year, 30 banks with agent banking outlets in suburban and rural areas had provided Tk 40,870 crore in loans against deposits of more than Tk 51,900 crore, according to the BB’s April-June 2026 quarterly report on agent banking.

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Of this amount, rural deposits accounted for more than four-fifths of the total. Against this amount, rural borrowers received 64 percent, or Tk 26,226 crore, of the total loans.

By contrast, urban areas, which accounted for only one-fifth of total deposits, received 36 percent of the loans -- proportionally higher than the rural areas.

Shah Md Ahsan Habib, a professor at the Bangladesh Institute of Bank Management (BIBM), said one of the major goals of agent banking was to ensure access to finance in rural areas and boost the rural economy.

“We expected banks to expand credit in rural areas. However, the lending data for rural and urban areas indicates that the goal has not yet materialised,” he said.

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The central bank said loan disbursement through agent banking in rural areas had increased, but the ratio remained low, indicating that rural people were still receiving fewer loans against their deposits than their urban counterparts.

“Bangladesh Bank is closely monitoring the progress and emphasising loan disbursement to rural people to stimulate the rural economy,” it added.

According to the BB report, as of June 2026, the total volume of loans increased 41 percent year-on-year and 8 percent from the previous quarter, indicating that lending through agent banking is gaining momentum.

The central bank said that, as access to finance remains one of the key challenges to financial inclusion, lending through agent banking is particularly beneficial for rural customers in developing countries like Bangladesh.

However, only 23 of the 30 banks disbursed loans through agent banking during the quarter.

GENDER GAP PERSISTS

The report also highlights a significant gender disparity in credit disbursement.

As of June this year, male borrowers received 84 percent of total loans, while female borrowers received only 13 percent, even though women accounted for 37 percent of total deposits during the same period.

“This figure potentially indicates female customers’ limited participation in rural enterprises,” the BB said.

“Nevertheless, there remains huge potential to identify more female entrepreneurs in rural areas who can access finance from banks through agents. Bangladesh Bank is paying attention to this matter and constantly encouraging banks to facilitate loans for female customers.”

The BB said female customers were clearly lagging behind male customers in receiving credit, despite holding half of all agent banking accounts, slightly more than male customers.

FIVE BANKS DOMINATE THE SECTOR

The report also cited high market concentration among a handful of banks.

Although 30 banks operate agent banking outlets, five institutions account for the vast majority of physical infrastructure, accounts, deposits, credit and remittances.

The top five banks -- Dutch-Bangla Bank, Bank Asia, Islami Bank, BRAC Bank and Al-Arafah Islami Bank -- operate 75 percent of the country’s nearly 20,600 agent banking outlets.

Dutch-Bangla Bank holds the largest share with 27 percent of the outlets, followed by Bank Asia with 25 percent.

The report said the top five banks accounted for 89 percent of over 2.72 crore banking accounts, with Dutch-Bangla Bank alone holding a 30 percent share.

In terms of deposits, the five banks commanded more than four-fifths of the total. Islami Bank held the largest share with about two-fifths of total deposits, followed by Dutch-Bangla Bank with 15 percent.

For lending, the top five institutions provided 96 percent of total credit. BRAC Bank PLC accounted for the largest share -- 74 percent of all loans disbursed -- despite holding only 6 percent of total deposits.

In remittances, Islami Bank ranked first, disbursing 56 percent of the total Tk 214,900 crore remitted through agent banking during the April-June quarter of this year.