AGENT BANKS ADVANCE COMMUNITY RESILIENCY DURING COVID-19 IN BANGLADESH
The COVID-19 crisis, one of the largest shocks in recent history, presented an opportunity to understand the degree to which Bangladesh’s financial systems are resilient. In July 2020, the Feed the Future Bangladesh Rice and Diversified Crop Activity (hereinafter referred to as the Activity) conducted a resiliency assessment to capture resilience at various levels of the financial ecosystem. The Activity used surveys and interviews with financial sector players to identify resilient models that benefited the financial system. This report will dig deeper into what it means to be a resilient financial model during the COVID-19 pandemic. It will also highlight how the Activity’s interventions supported resiliency, assessing one specific financial model: agent banking.
MARKET SYSTEMS APPROACH TO RESILIENCY
The Activity aims to increase incomes and improve food security and nutrition in 22 southern Bangladeshi districts included in the Feed the Future Zone of Influence (ZOI) through systemic market changes that promote a diversified farming system based on intensified rice production and the introduction of higher-value, nutrient-rich crops. The Activity adapts interventions based on the presumption that access to competitive, well-functioning markets strengthens the resiliency of vulnerable households.
Access to finance was selected as a cross-cutting sector during the start of the Activity because farmers and agricultural small- and medium-sized enterprises (agri-SMEs) in Bangladesh face significant challenges accessing the finance they need to increase efficiencies and expand services. The Activity’s implementation strategy has several goals: to use innovations in financial products, services, and their delivery; increase data use; and establish cost-efficient financial market channels to tap into a market of 15 million smallholder farmers, including four million in southwestern Bangladesh alone. Increasing financial resiliency in the agriculture sector will also help farmers afford quality inputs and modern technologies, increasing their production and income during shocks and stresses.