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Internship report on agent banking and its prospects in bangladesh a study on bank asia ltd.

Internship report on agent banking and its prospects in Bangladesh a study on Bank Asia Ltd. Prepared By Md. Riad Shahriar Riaz_Dept. Of Marketing_Comilla University.

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Internship report on agent banking and its prospects in bangladesh a study on bank asia ltd.

  1. 1. Internship Report On Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd. Supervised By Md. Abdullah Assistant Professor Department of Marketing Faculty of Business Studies Comilla University Prepared By Md. Riad Shahriar Riaz ID: 21507018 Session: 2014-15 Master of Business Administration Department of Marketing Comilla University 15th February, 2017
  2. 2. Letter of Transmittal 15th February, 2017 Md. Abdullah Assistant Professor Department of Marketing Faculty of Business Studies Comilla University Subject: Submission of the report of MBA Internship Program. Dear Sir, I have completed the internship program as a course requirement of M.B.A. program and now I am greatly impressed for the submission of my internship report on “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd.” I have tried my level best to bring out the original scenario regarding “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd.” with full of effectiveness & efficiency. To prepare this report I have collected what I believe to be the most relevant information to make my report as analytical and reliable as possible. I have concentrated my best effort to achieve the objectives of the report and hope that my endeavor will serve the purpose. The practical knowledge and experience gathered during my report preparation will immeasurably help in my future professional life. I am very glad to you because you assigned me to do the report. I hope that my report will meet your standard and oblige thereby. Yours faithfully, …………………………. Md. Riad Shahriar Riaz ID: 21507018 Session: 2014-15 Master of Business Administration Department of Marketing Comilla University
  3. 3. Supervisor Certification This is to certify that the internship report on “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd.” submitted by Md. Riad Shahriar Riaz, ID: 21507018, Session: 2014-15 as an integral part of the requirement of Master of Business Administration (MBA) degree from the Department of Marketing, Comilla University. The internship report may be accepted as a constructive work and significant part of the whole program. …………………….. Md. Abdullah Assistant Professor Department of Marketing Faculty of Business Studies Comilla University
  4. 4. Student Declaration I am Md. Riad Shahriar Riaz, hereby declare that this internship report titled “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd.” is uniquely prepared by me after the completion of three months working in Bank Asia Ltd. I also confirm that, this study has not previously been published in any journal or not submitted for the partial fulfillment of any degree, diploma or fellowship in any other Organizations or Universities. …………………………. Md. Riad Shahriar Riaz ID: 21507018 Session: 2014-15 Master of Business Administration Department of Marketing Comilla University
  5. 5. Acknowledgement I would like to express my profound gratitude to all those who have been instrumental in the preparation of this internship report. I wish to place on records, my deep gratitude for the support, direction, and supervision in every aspect from, Bank Asia officials, my faculty, and friends. First of all, I feel proud to express my deepest sense of gratitude to my honorable supervisor Md. Abdullah, Assistant Professor, Department of Marketing, Comilla University with superb helping tendency especially his scholastic guidance, constructive criticism and untiring help for successful completion of this internship program and writing this report. I would also like to show my utmost gratitude to all the officials of Bank Asia limited; especially the teams that I have worked with and all other teams in the Agent Banking function. I would like to mention the name of Md. Adil Raihan (Senior Executive Vice President, Agent Banking Division, Bank Asia Ltd.) for facilitating me with all the internal information that helped me to prepare the company overview and industry analysis. I cannot but mention Gobinda Kumar Biswas (First Assistant Vice President & Branch Manager, Brahmanbaria Branch) with utter thankfulness for his grateful support by providing information of his region.
  6. 6. Executive Summary Agent Banking means providing limited scale banking and financial services to the unbanked population through engaged agents under a valid agency agreement, rather than a teller/ cashier. It is the owner of an outlet who conducts banking transactions on behalf of a bank. It is one of the most popular financial services in the world where there are difficulties in accessing geographical locations easily. And that is why agent banking is very successful in Latin America & Africa. Other developed like United Kingdom, Australia etc. countries are also gradually deploying agent banking because it reduces the cost of operating of the bank. Most of the services of a bank can be provided through agents, thus people of remotest area of a country can be brought under proper financial structure by the virtue of agent banking. According to the agent banking guideline the software of any individual agent will be connected to the core software of the bank, so transactions that will take place in agent premises will be shown in the banking system real-time. To set up a branch in a specific area is very costly, so the banks are enhancing agent banking services for the unbanked people in which they have a little cost. There are almost 160 million people in Bangladesh but most of the people are unbanked. If these people can be included in the banking sector, then not only the economy of the country but also the unbanked people will be benefitted from it. Bank Asia is the 3rd Generation bank of Bangladesh which is the pioneer of Agent Banking in Bangladesh. It has started Agent Banking in Bangladesh for first time in 19th January, 2014 in Munshigonj as pilot phase. It is now operating its agent banking business operation in almost 50 districts through 1500 agent’s outlet including individual outlet, Union Digital Centre (UDC) etc. Its offering almost all banking services as deposit, withdraw, fund transfer, remittance payments, loan distribution, school banking etc. in a limited scale. Along with Bank Asia some other banks also start agent banking, such as Dutch Bangla Bank, Modhumoti Bank, NRB Bank, Mutual Trust Bank, Al-Arafah Islami Bank, Standard Bank etc. Agent banking is becoming one of the fastest growing banking business in Bangladesh but there has some limitation and problems, i.e. the customer can transect maximum 2 lac taka in cash, the agents are not well trained, financial problems of the agents, shortage of all necessary equipment, crisis of reliability on the agents as well as bank, uneducated customers, the agents are not well educated so that they could not understand the message and system properly etc. Plowshares, according to the study and customer’s opinion it has a bright future because there has a much portion of people who are out of the banking activities. These people can be financially included through agent banking. They can avail the banking services through it. They will also be encouraged in savings through DPS, TDS, and savings account.
  7. 7. Table Of Content Contents Page No. Chapter One: Introduction 1-7 1.1 Introduction 3 1.2 Origin of the Report 3 1.3 Objective of the Study 3 1.4 Scope of the Study 4 1.5 Methodology of the Study 1.5.1 Collection of Primary Data 1.5.2 Collection of Secondary Data 4 1.6 Research Design 4 1.7 Questionnaire Design 5 1.8 Sampling Plan 1.8.1 Sample Characteristics 1.8.2 Population 1.8.3 Sample Size 1.8.4 Sampling Unit 1.8.5 Sampling Procedure 5 1.9 Data Collection Technique 5 1.10 Research Tools 5 1.11 Data Analysis Technique 6 1.12 Analytical Technique 1.12.1 Regression Model 6 1.13 Data Analysis & Reporting Tools 6 1.14 Problems Definition 6 1.15 Limitation of the Study 7 Chapter Two: Company Profile 8-26 2.1 Historical Background 9 2.2 Company Profile of Bank Asia 10 2.3 Company Overview 11 2.4 Vision, Mission & Core Values 2.4.1 Vision 2.4.2 Mission 2.4.3 Core Values 11-12 2.5 Structure of the Corporate Office 13 2.6 Organizational Hierarchy 14
  8. 8. 2.7 Salient Features of Bank Asia 15 2.8 Product/Service Offerings 2.8.1 Business Banking 2.8.2 Small and Medium Enterprise (SME) 2.8.2.1 Term Loan 2.8.2.2 Over Draft 2.8.2.3 Special Products 2.8.3 Consumer Finance 2.8.4 Credit Card 2.8.5 Treasury 2.8.5.1 Money Market 2.8.5.2 Foreign Exchange Market 2.8.6 Deposit Accounts 2.8.7 Islamic Banking 2.8.7.1 Deposit Products 2.8.7.2 Investment Products 2.8.8 Service Products 2.8.9 Off-shore Banking Unit (OBU) Products 2.8.10 Capital Market Operation 15-18 2.9 Policy of Bank Asia 18 2.10 Corporate Objectives of Bank Asia 19 2.11 Bank Asia Agent Banking Model 19 2.12 Employment Opportunity 20 2.13 Slogan 20 2.14 Logo 20 2.15 Key Financial Condition 21 2.16 Branches 21 2.17 Corporate Head Office 21 2.18 Competitors 22 2.19 Corporate Social Responsibilities 2.19.1 Higher Study Scholarship 2.19.2 Ophthalmological Operation 2.19.3 Computer Learning Centers 2.19.4 Organizing Eye Camp 2.19.5 Blood Donation 2.19.6 Culture and Heritage 22-23 2.20 Green Banking 23-24 2.21 SWOT Analysis 2.21.1 Strength 2.21.2 Weaknesses 24-26
  9. 9. 2.21.3 Opportunities 2.21.4 Threats Chapter Three: Literature Review 27-32 Chapter Four: Findings & Analysis 33-61 4.1 Statistical Analysis 34-56 4.2 KMO and Bartlett's Test 57 4.3 Rotated Component Matrix 57-58 4.4 Multiple Linear Regression Analysis 58 4.5 Model Summary 59 4.6 ANOVA 59-60 4.7 Coefficient of Variance 60-61 4.8 Findings of The Study 61 Chapter Five: Conclusion and Recommendations 62-64 5.1 Recommendations 63-64 5.2 Conclusion 64 References 65-68 Appendix 69-77
  10. 10. “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia”
  11. 11. Chapter One Introduction
  12. 12. Agent Banking and Its Prospects in Bangladesh Introduction Page | 3 1.1 Introduction Agent banking is a unique and new service system to the banking sector and many people do not fully understand the systems of agent banking. Agent banking is a which provides to customers a limited scale banking and the various types of financial and transactional services to people who doesn’t get any opportunity or services from banking sector in their area and it will be provided through an agent who will be the representative of a certain bank and provide all the possible banking services they can get. Agent banking services is banking services which are provided through engaged agents under a valid agency agreement, service agreement or a similar agreement. It is the owner of an outlet or branch who conducts banking transactions on behalf of a structural bank. These retailers globally square measure being progressively used as necessary distribution channels for money inclusion. Bangladesh Bank has additionally determined to push this complimentary channel to achieve to the poor phase of the society additionally as existing bank client with a variety of monetary services particularly to geographically spread locations. With a read to making sure the security, security and soundness of the planned delivery channel Agent Banking pointers are framed by the Bangladesh Bank to allow banks to be engaged in agent banking. 1.2 Origin of the Report The internship report is a basic requirement for the MBA program. The proposed topic is “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia”. The topic is selected by myself, and supervised by Md. Abdullah, Assistant professor, Dept. Of Marketing, Comilla University. 1.3 Objective of the Study The main objective of the study is to gain practical knowledge about the job sector and compares it with theoretical concept. There are some specific objectives. Such as:  To develop knowledge about agent banking of Bank Asia.  To gain knowledge about present market scenario of Agent Banking in Bangladesh.  To know about the products and services of agent banking.  To gain knowledge about how agent banking works.  To identify the problem and prospects of agent banking in Bangladesh.  To give recommendations regarding the agent banking activities.
  13. 13. Agent Banking and Its Prospects in Bangladesh Introduction Page | 4 1.4 Scope of the Study Scope refers to the area of coverage. This report covers the major departments of the Banking system, organizational structure, and background, basic functions of the various divisions and the performance of the bank. For the project part, the study area and observations have been limited to Agent Banking Department, Products and services of Agent Banking, and different Functions of Agent Banking department of Bank Asia Limited. 1.5 Methodology of the Study I have used both qualitative and quantitative research in my study. Various statistical and analytical methods were used to process the primary data into presentable and understandable format. Data regarding completion of this research has been collected from both primary and secondary sources. 1.5.1 Collection of Primary Data o Face to face conversation with the Executives and officers of the Agent Banking department of Bank Asia Ltd. o Face to face conversation with the Customers of Agent Banking of Bank Asia Ltd. o Face to face conversation with the Agents of Agent Banking of Bank Asia Ltd. o Practical work experiences. 1.5.2 Collection of Secondary Data Along with the primary data I also have elaborated different types of secondary data in my research from various external sources. These are as follows:  Website of Agent Banking of Bank Asia Ltd.  Annual report of agent banking of Bank Asia Ltd.  Different papers of the organization along with related organization.  Other secondary sources were books and articles on the related factors in the conceptual framework of the report.  Website of Bangladesh Bank.  Different daily and online newspapers. 1.6 Research Design Quantitative research based on the primary data. The data has been collected through structured questionnaire.
  14. 14. Agent Banking and Its Prospects in Bangladesh Introduction Page | 5 1.7 Questionnaire Design The questionnaire of my survey have made by considering the types of Likert Scale. I tried my level best in setting up the questions and keep the questions easily communicable and recordable. Furthermore, I prepared this questionnaire in such a way that must uplift, motivate and encourage the respondents to participate, cooperate and complete the interview. In beginning of the questionnaire, I introduce myself, mention the name of the research topic, and put a little description about the purpose survey respectively. Then, I proceed to respondent section. In the third portion of the questionnaire, there are 18 direct and correlated questions placed. I have used five-point Linkert Scale in the questionnaire of my survey. Each item was rated on the five-point Linkert scale anchored the verbal statement at the number- 1= “Strongly Disagree” 2= “Disagree” 3= “Neutral” 4= “Agree” 5= “Strongly Agree” 1.8 Sampling Plan 1.8.1 Sample Characteristics The sample of this study has been consisted of the customers and agents of agent banking of Bank Asia ltd. I selected 60 peoples as sample from Comilla and Brahmanbaria. 1.8.2 Population For time and budget constraints, I decided to pursue the agent and customers of agent banking of Bank Asia Ltd. who have taken our services. 1.8.3 Sample Size For conducting this research, I have taken the sample size as 60. 1.8.4 Sampling Unit Agents and customers of Comilla and Brahmanbaria who give and use Agent Banking services of Bank Asia Ltd. 1.8.5 Sampling Procedure For conducting this research, I used Cluster sampling method. Cluster sampling is a sampling technique used when "natural" but relatively homogeneous groupings are evident in a statistical population. 1.9 Data Collection Technique Survey method was used to collect data. 1.10 Research Tools Data were collected through questionnaire.
  15. 15. Agent Banking and Its Prospects in Bangladesh Introduction Page | 6 1.11 Data Analysis Technique After collecting the data, then these were organized and summarized through scrutiny, then coding and interpreting the result. 1.13 Analytical Technique Calculating Mean, Standard deviation and 95% confidence level. 1.13.1 Regression Model: The functional relationship between the variable can be expressed as: Multiple Regression Equation: Y= β 0 + β1 X 1 + β 2 X 2 + β3X3 + Ui 1.14 Data Analysis & Reporting Tools Data analysis has been done by using different types of computer application programs such as MS word, MS Excel and SPSS 20.0 1.15 Problems Definition When I was working with Agent Banking of Bank Asia Ltd. I found some problems which are creating obstacles in its growth. These are as follows:  The agents are not well trained about the activities of agent banking.  The whole system is online but the server often faces problems.  The 3G is not always available in the village which is needed to work smoothly.  The Bank officers are not well informed about all the services and activities of agent banking.  The peoples are feeling confusion about it. They can’t have hundred percent faith in it.  The agents are not well educated.  Most of the cases the agents are too busy with the work of Union Digital Centre that they can’t give enough time in the banking activity.  The profit for the agents is not enough. They will have to wait a long time to make it cash cows but most of them don’t have that much patience.  Bank Asia doesn’t provide any kinds of commission to the agents for account opening or feeling up the account form. But some others bank giving a specific amount of commission for account opening.  Most of the agents are not solvent enough to invest in this business but it requires a lot of investment.  The location of the outlets is not in proper places; these should be in the markets rather than in Union Parishad.  Bank doesn’t take promotional program in a regular basis.  The customers are not well informed about the products and services of the agent banking. They don’t have enough knowledge about agent banking.
  16. 16. Agent Banking and Its Prospects in Bangladesh Introduction Page | 7 1.16 Limitation of the Study As I was an employee of Bank Asia, it was easy to collect data from different parts. But there has some limitation also. I had to face different problems during the study. Some of these are given below-  Respondents were not willing to share information.  Most of the calculations had to be made taking Bank Asia Ltd.’s figures as the industry average.  Most of the relevant literature and study materials on the banking sector were not updated.  Lack of intellectual thought and analytical ability to make it the most perfect one.  It was very difficult to sketch the complete picture of Bank Asia, Agent Banking activities within such a short time period of three months.
  17. 17. Chapter Two Company Profile
  18. 18. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 9 2.1 Historical Background Bank Asia Limited is a schedule Bank under private sector established with in the ambit of Bank Company Act, 1991 and was incorporated as a Public Limited Company Under Company Act, 1994 on September 28, 1999. The Bank started commercial banking operations from November 27, 1999 with the inauguration of the Bank’s Corporate Office at the Rangs Bhaban. It was the time when a rapid economic development in the country concurrent with urbanization and life style change created demands for new banking products and services. A huge public response has enabled the Bank to keep up the plan of expanding its network. The opening of the principal office was the big leap forward and successively the opening of Gulshan and Chittagong branch expanded the horizon of Bank Asia to bring its services to valued clients more effectively. Within a short period, the bank has opened four more branches in Dhaka and two branches in Sylhet and Kishorgonj. In February 2001, Bank Asia took over the Bangladesh operation of The Bank of Nova Scotia, the first acquisition of a foreign bank by a local bank in the banking history of Bangladesh. Later, Bank Asia took over the Bangladesh operation of Muslim Commercial Bank of Pakistan in December 2001. These courageous moves were possible for some visionary decision makers and also dedicated team of professionals who are constantly putting their best efforts to establish the bank as one of the leading concerns in the industry. Bank Asia Limited is one of the most successful banks among the third- generation private banks. The bank has successfully entered its seventeenth year of operations. With professional and dedicated team of management having long experience, commendable knowledge and expertise in conventional and modern banking, the bank has achieved success among its peer group within a short span of time. Within a short span of time Bank Asia has established itself as one of the fast growing local private banks. It has at present a network of one hundred and twelve branches serving many of the leading corporate houses and is gradually moving towards retail banking. Its other significant delivery channel is the shared ATM Network. Bank Asia has almost 150 ATMs as a member of ETN (E – cash) along with eleven other banks. In 2003 the Bank again came to the limelight with oversubscription of the Initial Public Offering of the shares of the Bank, which was a record (55 times) in our capital market’s history and its shares commands respectable premium. Bank Asia has been actively participating in the local money market as well as foreign currency market without exposing the Bank to vulnerable positions. The Bank’s investment in Treasury Bills and other securities went up noticeably opening up opportunities for enhancing income in the context of a regime of gradual interest rate decline. Bank Asia is maintaining its competitiveness by leveraging on its Online Banking Software and modern IT infrastructure. It is the pioneer amongst the local banks in introducing innovative products like SMS banking, and under the ATM Network the Stellar Online Banking software enables direct linking of a client’s account, without the requirement for a separate account. Currently Bank Asia is bank with a network of 112 branches including 4 rural branches.
  19. 19. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 10 2.2 Company Profile of Bank Asia Table-1: Company Profile of Bank Asia Type Private Industry Banking Letter of Intent received February 24, 1999 First meeting of the Promoters held April 15, 1999 Certificate of Incorporation received September 28, 1999 Certificate of Commencement of Business September 28, 1999 First meeting of the Board of Directors held October 01, 1999 Banking license received October 06, 1999 First Branch license received October 31, 1999 Inauguration of Bank November 27, 1999 Headquarters Rangs Tower(2nd to 6th Floor), 68,Purana Paltan , Dhaka-1000. Key people Mr. A. Rouf Chowdhury (Chairman), Md. Arfan Ali (President & Managing Director) Products Deposit Schemes, Credit Schemes, SME banking, Islamic Banking, Miscellaneous Products Number of Promoters 22 Number of Directors 12 Number of Branches 112 Number of SME centers 10 Islamic wings 06 Brokerage branches 02 Total Customer Deposit 18,000 Crore Taka Total Bank Account 1,15,981 Slogan For Better Tomorrow Website http://www.bankasia-bd.com Source: Website of Bank Asia
  20. 20. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 11 2.3 Company Overview: “For A Better Tomorrow” is the mission of Bank Asia Limited through a contemplation of assuring a professional term of Bankers is running the day-to-day operation of the Bank. Bank Asia has so far been highly successful in keeping its customers satisfied with its high quality service, while continuing its expansion to reach more people around the country. Bank Asia conducts all types of commercial banking activities. The Bank is involved in most of the areas of commercial banking operations. The core business of the Bank comprises of trade finance, term finance, working capital finance and corporate finance. Bank Asia has acted as the lead arranger in raising term loan for a number of projects under syndicated finance and also participated in some cases under such financing arrangement. The Bank is also providing personal credit, service related to local and foreign remittances and several other products. The “Personal Credit” scheme of the Bank, which is designed to help the fixed income group in raising standard of living is competitively priced and has been widely appreciated by the customers. Bank Asia’s program under “Poverty Alleviation Scheme” delivered through rural branches in the form of micro credit is playing an important role towards socio economic development of the poor people in the rural areas. The management of Bank Asia is determined to maintain and upgrade the quality of these resources through continuous training and upgrading technology to keep pace with market demands, new developments and practices of the competitors. Bank Asia entered the market at a time when economic policy environment of the country is poised for higher level of business activities and growth. The prevailing macroeconomic management and the government’s determination to carry on reforms in the banking sector provide a supporting and encouraging environment. Bank Asia Limited started its service with a vision to serve people with modern and innovative banking products and services at affordable charge. Being parallel to the cutting edge technology the Bank is offering online banking with added delivery channels like ATM, Tele- banking, SMS and Net Banking. And as part of the bank's commitment to provide all modern and value added banking service in keeping with the very best standard in a globalize world. 2.4 Vision, Mission & Core Values Bank Asia is a third generation public limited commercial bank. It received the Certificate of Incorporation on September 28, 1999 and came to operation on November 27, 1999. Now after 12 faithful years of dedicated and reliable services, Bank Asia has created an envious position for itself among the leading banks of the country with an Asset base of TK. 117 billion, Deposit of TK 95 Billion and 70+ outlets all over the country. But most importantly, the Bank has an unsurpassed legacy attached with its image. Pay-off line/slogan: “For A Better Tomorrow”
  21. 21. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 12 2.4.1 Vision Bank Asia's vision is to have a poverty free Bangladesh in course of a generation in the new millennium, reflecting the national dream. Our vision is to build a society where human dignity and human rights receive the highest consideration along with reduction of poverty. 2.4.2 Mission  To assist in bringing high quality service to our customers and to participate in the growth and expansion of our national economy  To set high standards of integrity and bring total satisfaction to our clients, shareholders and employees  To become the most sought after bank in the country, rendering technology driven innovative services by our dedicated team of professionals 2.4.3 Core Values  Place customer interest and satisfaction as first priority and provide customized banking products and services  Value addition to the stakeholders through attaining excellence in banking operations  Maintain high ethical standard and transparency in dealings  Be a compliant institution through adhering to all regulatory requirements  Contribute significantly for the betterment of the society  Ensure higher degree of motivation and dignified working environment for our human capital and respect optimal work-life balance  Committed to protect the environment and go green
  22. 22. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 13 2.5 Structure of the Corporate Office Figure-1: Structure of the Corporate Office Source: Bank Asia’s Official Document Board of Directors Chairman Managing Director Deputy Managing Director Advisor General ServiceCompany Secretary Operations Board Affairs Share Department Implementation of Board Decisions Human Resource Accounts/ Budget MIS/ITDevelopment & Planning Specialized Services TreasuryInternational DivisionCredit Dealing RoomForeign Ex. Call Market Corporate/Retail Product Development & Marketing Public Relations
  23. 23. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 14 2.6 Organizational Hierarchy Figure-2: Organizational Hierarchy Source: Bank Asia’s Official Document President & Managing Director Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President First Vice President Assistant Vice President Senior Executive Officer First Assistant Vice President Senior Executive Executive Officer Senior Officer Officer Junior Officer Assistant Officer Banking Officer Trainee Officer
  24. 24. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 15 2.7 Salient Features of Bank Asia  Only Bangladeshi Bank to acquire (Purchase) operations of 02 (two) foreign banks namely: Bank of Nova Scotia of Canada Muslim Commercial Bank of Pakistan  Majority stakeholder of ERA INFOTECH (A joint Venture IT Company)  Centralized Trade Services Operation (Facilitates Export/ Import and Inward and Outward Remittance foreign-AD Branches)  Central Clearing Fully Automated  Online Charges – Free  Credit Rating (valid up to June 2012) Long Term: AA2 Short Term: ST1  No. of Shareholders (up to December 2011): 16,602 2.8 Product/Service Offerings 2.8.1 Business Banking  Overdraft  Secured Overdraft  Secured OD (Earnest Money)  Working capital finance  Loan against Trust Receipt  Loan against Cash Incentives  Bill discounting  Loan Syndication and structured Finance  Packing Credit  Demand Loan  Demand Loan (work order)  Time Loan  Transport Loan  House Building Loan  Term loan  Lease Finance  Letter of Guarantee  Letter of Credit  Back to back Letter of Credit
  25. 25. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 16 2.8.2 Small and Medium Enterprise (SME) 2.8.2.1 Term Loan o Subidha -Unsecured Trading o Sondhi -Secured Trading o Sristi – Unsecured Manufacturing o Shombridhi- Secured Manufacturing o Shofol – Unsecured Service o Sheba- Secured Service 2.8.2.2 Over Draft  o Somadhan – Secured 2.8.2.3 Special Products o Utshob- Seasonal Business o Subarno- Women Entrepreneur 2.8.3 Consumer Finance  Auto Loan  Consumer Durable Loan  Unsecured Personal Loan  House Finance  Loan for Professionals  Senior Citizen Support 2.8.4 Credit Card o MasterCard Local Credit Card o VISA Dual Currency Credit Card o VISA Local Credit Card o VISA Butterfly Credit Card o VISA Mini Credit Card o VISA International Card against RFCD, RQ A/C o Virtual Card o SME Credit Card o NBFI Card Cheque o International Prepaid Hajj Card
  26. 26. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 17 2.8.5 Treasury: 2.8.5.1 Money Market   Overnight Call  Repo and Reverse Repo  Swap  Sale and Purchase of Treasury Bill & Bond  Term Placement  Term Borrowing 2.8.5.2 Foreign Exchange Market   Spot  Forward  Interbank Buy / Sale 2.8.6 Deposit Accounts  Saving Account  Current Account  Short Notice Deposit  Fixed Term Deposit  Foreign Currency Account  Deposit Pension Scheme  Monthly Benefit Scheme  Double Benefit Scheme  Triple Benefit Scheme  Bank Asia Sanchoy Plus 2.8.7 Islamic Banking 2.8.7.1 Deposit Products  Al-Wadiah Current Account (AWCA)  Mudaraba Savings Account (MSA)  Mudaraba Special Notice Deposit Account (MSNDA)  Mudaraba Term Deposit Account (MTDA) of different  Tenure  Mudaraba Hajj Savings Scheme (MHSS)  Mudaraba Deposit Pension Scheme (MDPS)  Mudaraba Monthly Profit Paying Deposit Scheme (MMPPDS)  Smart Junior Saver (SJS)
  27. 27. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 18 2.8.7.2 Investment Products  Bai Murabaha Muajjal  Hire Purchase Shirkatul Melk (HPSM)  Musharaka  Quard against Accepted Bills 2.8.8 Service Products  ATM Services  Remittance Service  Locker Service  Online Banking  Internet Banking  Phone Banking  Mobile Banking  Remote Banking (EBEK)  SWIFT  Centralized Trade Services  Student File  Travellers’ Cheque 2.8.9 Off-shore Banking Unit (OBU) Products o On-shore Bill Discounting through OBU o Bill Discounting o Capital Finance o Working Capital Finance o Trade Finance o On-shore Export Bill Discounting 2.8.10 Capital Market Operation  Brokerage Operation  Margin Loan 2.9 Policy of Bank Asia Bangladesh is trying hard and soul to make and give effort to be an efficient player in the global market in terms of business. Accordingly, Bank Asia Limited will as a matter of policy, mobilized its financial, non-financial and human resource in conformity with international norms, standards and practices. In the domestic economic field Bank Asia Limited has set its sight on providing its clientele the edge of banking and finance which will enable then to run their enterprises profitability. Bank Asia Limited give a hand the customer with its technology, know how training and specialization, and will provide world class banking system.
  28. 28. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 19 2.10 Corporate Objectives of Bank Asia Bank Asia’s corporate objectives are reflected in the following areas:  Highly personalized service.  Customer-driven focus.  Total commitment to quality.  Contribution in the economy.  Quality of human resources.  Commitment to its clients at each level. 2.11 Bank Asia Agent Banking Model Bank Asia made a unique Agent Banking model with technology based banking concept ensuring appropriate security with real-time banking for customers. Agents Booths are distinctly branded with Bank Asia Agent Banking logo to provide products and Services of Bank Asia. All the Agent booths are equipped with Laptop/P.C, Image capturing device, POS machines etc. Agent banking transactions are on real time basis and integrated with Bank’s Core Banking solution. Customers get instant confirmation of transaction through Mobile SMS and system generated Printed money receipts. Besides, following steps are taken for smooth handling of Agent Banking: ▪ Bank Asia Agent Booths are distinctly branded with Bank Asia logo & Agent’s name, a like to a small bank branch. ▪ Bank Asia branches and Regional office will monitor agent operating in the area for smooth functioning besides monitoring by Agent Banking department. ▪ Bank Asia agent are fully equipped with I.T devices like POS, card reader, Image capturing Web Cam, biometric identification system and mobile connectivity through internet banking. ▪ All Agent Banking Customers are logged through their Biometric authorization. ▪ Customer transactions are integrated to the Core Banking System and real time transaction and customer gets instant transaction confirmation through SMS and system generated printed receipt. ▪ Bank Asia Agent booths are branded through Bank's logo clearly, which identifies the Bank and agent’s identity to the customer. Bank’s contact number and call center number also given for emergency customer help. ▪ For cash transaction, Agent have to maintain an account in Agent Banking system, which is fetched for cash deposit and withdrawal transaction by customers and system automatically debit or credit agent account and customer account simultaneously. Agent has to maintain sufficient balance to accommodate customer transaction value. The Agent account balance is determined on the volume of transaction and Agent account have to maintain sufficient balance and Cash in hand balance for uninterrupted transaction of customers.
  29. 29. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 20 2.12 Employment Opportunity Bank Asia recruit graduate and post graduate candidate in two different post. One is Trainee Officer and another is Management Trainee Officer. In trainee officer candidate should have minimum graduation in business studies, statistics, physics, mathematics or in economics. After joining as Trainee Officer (TO), the candidate should have to be in training period for one year. After successful training of one year he/she will be absorbed as banking officer. On the other hand, for Management Trainee Officer, the candidate should have minimum Post graduation degree in business studies, statistics, physics, mathematics or in economics. After joining as Management Trainee Officer (MTO), the candidate should have to be in training period for one year. After successful training of one year he/she will be absorbed as senior officer. 2.13 Slogan “For A Better Tomorrow’’ is the Slogan of the Bank Asia Limited. As the Vision is to make Bangladesh a poverty free country and Mission is to serve the best to satisfy the client, Shareholders and also satisfy the employees the slogan is go through with the vision and mission. 2.14 Logo The First one from the left is the logo of bank Asia, then the first one of the right side is the logo with name of Bank Asia, and the rest is the logo of Agent Banking of Bank Asia Ltd.
  30. 30. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 21 2.15 Key Financial Condition Table-2: Key Financial Condition of Bank Asia Title Amount (In Million) Total deposits (as on 30/06/2016) Tk. 178,518.11 Total advance (as on 30/06/2016) Tk. 164,021.51 Export (Jan-16-Jun-16) Tk. 53,142.08 Import (Jan-16-Jun-16) Tk. 78,298.62 Remittance (Jan-16-Jun-16) Tk. 22,333.80 Total Assets (as on 30/06/2016) Tk. 235,930.60 Credit Rating Status AA2 - Long Term ST-2 Short Term Contribution to National Exchequer (2015) Tk. 3,900.55 Statutory Reserve (as on 30/06/2016) Tk. 6,084.43 Retained for investment and future (2015) Tk. 526.98 Source: Bank Asia’s Webpage 2.16 Branches There are 112 branches along with the corporate head office in Purana Paltan. The branches are located in the important cities of the country as well as in every district of the country, such as: Dhaka, Chittagong, Sylhet, Khulna, Rajshahi, Barishal, Rongpur, Comilla, Mymensing, Narayanganj, Gajipur etc. 2.17 Corporate Head Office Table-3: Corporate Head Office Head Office of Bank Asia Ltd. Head Office of Agent Banking of Bank Asia Ltd. Rangs Tower (2nd to 6th Floor) 68, Purana Paltan Dhaka-1000 Tell: 02-7110042,7110062,7110147, 7110173,7110177,7110218, Fax : 88-02-7175524, E-mail : bankasia@bankasia.com.bd Web : www.bankasia-bd.com Bengal Centre (3rd Floor) 28 Topkhana Road Dhaka-1000 Tell: 88-02-7125019, 7173592 E-mail: Agentbanking@bankasia.com.bd Web: www.bankasia-bd.com/ Source: Bank Asia’s Webpage
  31. 31. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 22 2.18 Competitors In terms of Agent Banking the competitors of Bank Asia are:  NRB Bank Ltd.  Dutch Bangla Bank Ltd  Al-Arafah Islami Bank Ltd.  Modhumoti Bank Ltd.  Mutual Trust Bank Ltd.  UCBL  Standard Bank Ltd. 2.19 Corporate Social Responsibilities Bank Asia has been conscious of corporate social responsibility from the very beginning of its operation in 1999. The Bank looks beyond short-term quantitative gains and concentrates on issues which make the financial institution socially responsible and thus expects a sustainable balanced growth. Bank Asia has three major CSR programs. These are as follows:  Higher Study Scholarship  Ophthalmological Operation  Operating Computer Learning Centers 2.19.1 Higher Study Scholarship Bank Asia provides higher scholarship to rural poor meritorious students, who are studying in important subjects in public universities. So far (since 2005) 215 students have been awarded the scholarship. Of them, 94 scholarships have been provided this year. Total expenditure of scholarship this year is Tk 53.08 lac for this purpose while Tk.1.57 crore till date. Next year we have a plan to provide 100 more scholarships, which will raise beneficiary numbers to 334, and budget will be Tk 10.64 million/Tk 1.64 crore. The scholarships are given on the basis of SSC and HSC results. It may be mentioned that Bank Asia gives scholarships for higher study to the meritorious students in the rural areas, where the Bank has branches. A total of 134 (one hundred thirty- four) students have been selected for Bank Asia Higher Study Scholarship for the current year. 2.19.2 Ophthalmological Operation The Bank bears entire cost of cataract-related eye operations, whose parents are poor and cannot afford the high cost of operations. Since 2006, 874 operations have been conducted under the program at a cost of about Tk 92 lac (till July, 2010). Most of the children are leading normal life and learning education.
  32. 32. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 23 2.19.3 Computer Learning Centers Bank Asia, with the help of D-net, is operating 13 Computer Learning Centers (since 2006) in rural areas, where rural youths learn computer education. A total of Tk 4.7 lac has been spent for operational cost of these centers this year. Besides, 12 more learning centers have been set up this year involving Tk.1.58 million/Tk.15.76 lac as a part of our expansion program. So far, about 3000 youths received computer training though these centers, and cost involvement in this CSR program is Tk.1.03 crore (till Dec. 2009) 2.19.4 Organizing Eye Camp Bank Asia started eye screening of 10,000 children in 50 schools in four upazilas of Kishoreganj district namely, Tarail, Sadar, Hossainpur and Pakundia with the help of Kishoreganj Eye Hospital of Nari Uddog Kendra (NUK). If the pilot program, involving Tk.5 lac, is successful we will cover whole the district and subsequently whole the country to save eyes of the children of the nation. 2.19.5 Blood Donation Bank Asia every year organizes blood donation programs where Bank staffs donate blood. As recognition, Bank Asia received the Highest Blood Donation Organization Award from the Bangladesh Red Crescent Society Blood Centre in this (2010) year. Bank Asia spent Tk 1 million/10 lac for organizing blood donation program. 2.19.6 Culture and Heritage Bank Asia is dedicated to protect culture and heritage of the country. In respect to the martyred freedom fighters, Bank Asia donated Tk 1 crore for Multijuddha Jadughar Nirman, Tk2 lac to Muktijuddher Smriti sangrakshan Kendra for the international conference on Human Rights. 2.20 Green Banking Some green banking activities of Bank Asia are given bellow:  Bank Asia has been one of the pioneers in introducing Online Banking and it covers 112 branches/ SME centers, 68 own ATMs, 2890 shared ATMs. Clients can also have access to their accounts through Internet & Mobile Banking.  Bank Asia has been equipped with Bangladesh Automated Clearing House (BACH) system since October 2010, which allows paperless cheque clearing.  Instruments of Green Banking offered by Cards Division include E-Statement, SMS Banking, SMS Alert, Net Banking, E Fund Transfer, Digital Attendance and E Mail corresponding, which help reducing printing paper.
  33. 33. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 24  Our Cards Department has formally launched its digital filling system where more than 200,000 pages of various files have been digitally archived and indexed it for digital query.  They are saving around 32% electricity (used for lighting purpose) by using the day light in our Corporate Office. We have installed Solar panels in our 7 branches located at Patherhat, Madhobdi, Dohajari, Hajigonj, Faridpur, Elephant Road and Lalmatia branches.  In an alliance with a Canadian firm AlertPay, Bank Asia is the first local bank to introduce an easy online payment gateway service that will allow the country's IT freelancers to bring their dollars deposited in the accounts with AlertPay in any of their bank accounts in the country through Bank Asia at cheaper rate.  Bank Asia is the 10th private commercial bank to launch Express cash system which is easier and faster domestic remittance service.  Bank Asia is a pioneer in rolling out Online Learning Tool (OLT). Our Human Resources Department (HRD) implemented OLT by which the trainees can learn from their own work station without attending any formal class. 2.21 SWOT Analysis Every organization is composed of some internal strengths and weaknesses and also has some external opportunities and threats in its whole life cycle. These are discussed below: 2.21.1 Strength  Bank Asia provides its customers excellent quality of service.  Bank Asia draws its strength from the adaptability and dynamism it possesses. It has quickly adapted to world class standard in terms of banking services. Bank Asia has also adapted state of the art technology to connect with the world for better communication to integrate facilities.  Bank Asia is a financially sound company backed by the enormous resource base of the mother concern Rangs Group.  All the levels of the management of Bank Asia are solely directed to maintain a culture of the betterment of the quality of the service and development of a corporate brand image in the market through organization wide term approach and open communication system.  Bank Asia utilizes state-of-the-art technology to ensure consistent quality and operation. The corporate office is equipped with SWIFT (SWIFT is a banking software, used by Bank Asia). All other branches are also equipped with SWIFT system.  The key contributing factor behind the success of the Bank Asia is its employee, who are highly trained and most competent in their own field.
  34. 34. Agent Banking and Its Prospects in Bangladesh Company Profile Page | 25  Bank Asia provides its workforce an excellent place to work in. Total complex has been centrally air conditioned. 2.21.2 Weaknesses  Bank Asia has limited human resources compared to its financial activities. As a result, many of the employees are burdened with extra workloads and work late hours without any overtime facilities. This might cause high employee turnover that will prove to be too costly to avoid.  The officers of Agent banking of Bank Asia are not well trained because they were sent for the work after a short time training. For that reason, they can’t work smoothly.  The Agents are not well trained also. 2.21.3 Opportunities  Agent banking is a part of A2i (Access to Information) projects of Government, for that reason govt. also giving special facilities for this. Govt. gives space in Union Parishad to operate its business.  Bank Asia starts Agent Banking for first time in Bangladesh and it is covering the whole country rapidly. So it has much scope to enlarge its business comparative to its competitors.  Agent Banking is becoming popular day by day to the mass people because it takes less time for any kinds of transection where the branches are taking much time for crowd of many people. 2.21.4 Threats  There are lots of banks in Bangladesh but all of these hadn’t start agent banking yet. These are starting it gradually.  As previously mentioned, the world is advancing e-technology very rapidly. Though Bank Asia has taken effort to join the stream of information technology, it is not possible to complete the mission due to poor technology and infrastructure of our country.  Due to high customer demand, more and more financial institutions are being introduced in the country. There are already 58 banks of various types are operating in the country. Many banks are entering the market with new and lucrative products. The market for banking industry is now a buyer dominated market. Unless Bank Asia can come up with attractive financial products in the market, it will have to face steep competition in the days to come.
  35. 35. Chapter Three Literature Review
  36. 36. Agent Banking and Its Prospects in Bangladesh Literature Review Page | 28 A recent study on Agent banking, the revolution in financial service sector of Bangladesh by Md. Razib Siddiquie found that Agent banking is very successful in Latin America & Africa. Other developed like United Kingdom, Australia etc. countries are also gradually deploying agent banking because it reduces the cost of operating of the bank. Most of the services of a bank can be provided through agents, thus people of remotest area of a country can be brought under proper financial structure by the virtue of agent banking. According to the agent banking guideline the software of any individual agent will be connected to the core software of the bank, so transactions that will take place in agent premises will be shown in the banking system real-time and those transactional statements can be used anywhere and everywhere for different purposes of the client. A recent study on The impact of agent banking on customer satisfaction by Masila Christopher kitali et. al. (June, 2015) showed that most customers were satisfied with agent bank services that is a mean score of above 2.0. The factors that led to this were such as banking agents being highly qualified and responsive towards customer satisfaction. The customers said that they would prefer to go to agent bank outlets other than the bank itself. They also said that they were regular agent banking customers and would recommend it to others. Impact of Agent Banking on Performance of Deposit Money Banks in Nigeria by Nkiru Patricia-Nezianya & Daniel Izuchukwu (2014) investigated that Agent banking has become an essential practice of financial institution in bringing their services closer to the people at the grass root. There is no doubt that agent banking if adopted into Nigerian banking system will help to improve banks profitability. Agent Banking and Its Prospects in Bangladesh by Mirza Sami Adib (2016) had showed that Agent banking service is kind of new to this country and it’s still not that spread across the country. The main purpose of agent banking is to bring and introduce the banking services to the people of rural areas through an agent where the physical structure of a bank can’t establish there. How Agent Banking Changes the Economics of Small Accounts by Clara Veniard et. al. (November 2010), the amount of money expended by financial service providers to serve a poor customer with a small balance and conducting small transactions is simply too great to make such accounts viable. In addition, when financial service providers do not have branches that are close to the customer, the customer is less likely to use and transact with their service. However, we see the emergence of new delivery models as a way to drastically change the economics of banking the poor. By using retail points as cash merchants (defined here as agent banking), banks, telecom companies, and other providers can offer saving services in a
  37. 37. Agent Banking and Its Prospects in Bangladesh Literature Review Page | 29 commercially viable way by reducing fixed costs and encouraging customers to use the service more often, thereby providing access to additional revenue sources. Fred Gichana Atandi, Challenges of agent banking experiences, There is an increasing need to promote technological and institutional innovation as a means to expand financial system access and usage, including addressing infrastructure weaknesses and empowering business enterprises by developing financial literacy and financial capability programs to bring all people on board and all to participate in economic development of a country, perhaps agent banking will offer a solution to slow pace of individuals enterprise development especially from the rural areas. Use of agents in branchless banking for the poor: rewards, risks, and regulation by Timothy R. Lyman et. al. (October, 2006) realize that rather than using bank branches and their own field officers, agent banking offers banking and payment services through postal and retail outlets, including grocery stores, pharmacies, seed and fertilizer retailers, and gas stations, among others. For poor people, “branchless banking” through retail agents1 may be far more convenient and efficient than going to a bank branch. For many poor customers, it will be the first time they have access to any formal financial services—and formal services are usually significantly safer and cheaper than informal alternatives. Nefa Chiteli (2013) investigated Agent Banking Operations as a Competitive Strategy of Commercial Banks, and found that Organizations exist as open systems hence there is constant interaction within the environment in which they operate. In this era of ever changing global economy with every organization striving to achieve competitive advantage since the changes present both opportunities and challenges, Johnson et.al. (2003) notes that the organizations must find ways of operating by developing new competencies as the old competencies gained are quickly eroded due to changes in both internal and external environments. Because organizations cannot run away from innovation which sustains them, there is need for them to change with the changes in the environment otherwise they would be irrelevant. To ensure survival and success, organizations need to develop capability and capacity to manage threats and exploit emerging opportunities promptly. This requires formulation of competitive strategy that refers to the positioning of a firm to maximize the value of the capabilities that distinguish it from its competitors. The Kenyan business environment has experienced many changes among them: international, privatization, increased competition, acceleration implementation of economic reforms, increased customer demands, privatization and commercialization of public sector, price decontrols and liberalization of both domestic and foreign markets (Aosa, 1992). According to Allen et. al. (2006), when a firm design, produces and markets a product more efficiently than its competitors such a firm has implemented a cost leadership strategy.
  38. 38. Agent Banking and Its Prospects in Bangladesh Literature Review Page | 30 Attempts to reduce costs will spread through the whole business process from manufacturing to the final stage of selling the product. Any processes that do not contribute towards minimization of cost base should be outsourced to other organizations with the view of maintaining a low cost base, Allen et. al. (2006), Low costs will permit a firm to sell relatively standardized products that offer features acceptable to many customers at the lowest competitive price and such low prices will gain competitive advantage and increase market share If the low cost base could be maintained for longer periods of time it will ensure consistent increase in market share and stable profits hence consequent in superior performance. Decision makers in a cost leadership firm will be compelled to closely scrutinize the cost efficiency of the processes of the firm. Maintaining the low cost base will become the primary determinant of the cost leadership strategy. For low cost leadership to be effective a firm should have a large market share (Allen et. al.2006). New entrants or firms with a smaller share may not benefit from such strategy since mass production, mass distribution and economies of scale will not make an impact on such firms. According to Allen et. al. (2004) a low cost may act as entry barriers since new entrants require huge capital to produce goods or services at the same or lesser price than a cost leader. Further some factors such as technology which may be developed through innovation and some may even be resources developed by a firm such as long term healthy relationships build with distributors to maintain cost effective distribution channels or supply chains. Similarly, economies of scale may be an ultimate result of a commitment made by a firm such as capital investments for expansions. Also raising barriers for competition by virtue of the low cost base that enables the low prices will result in strong strategic positioning in the market. The company or business unit may charge a premium for its product. This specialty can be associated with design, brand image, technology, features, dealers, network or customer’s service. Barney (2001) states that though a company may have several basis of differentiation, at the end it is only a matter of customer perception. To build competitive advantage through differentiation, a firm must search out sources of uniqueness that are burdensome and time consuming for rivals to match (Thompson and Strickland, 2003). A focus strategy should target market segments that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investment. Organizations can make use of the focus strategy by focusing on a specific niche is sometimes referred to as the niche strategy (Lynch, 2006). Firms pursuing this strategy are willing to service isolated geographic areas, satisfy needs of customers with special financing, inventory or servicing problems or even to tailor the products to somewhat unique demands of the small to medium sized customers. According to Suoranta and Mattila (2004), as technology continues to be an important element in financial service delivery, understanding the factors that influence the behavior of consumers towards using electronic banking technologies will continue to be an important
  39. 39. Agent Banking and Its Prospects in Bangladesh Literature Review Page | 31 area of research. According to the EFIA (2010), MFIs, commercial banks and other financial institutions have tended to establish their traditional branches in urban centre leaving out on areas that often do not have incentive or capacity to establish formal branches, this leaves out a significant population from accessing banking services. Accessing financial services ensures that an individual can access credit for personal development. MFIs and banks today can take their financial services to this hard to reach and geographically dispersed areas and tap this segment of clientele through agent banking. According to the Oxford policy management (2010), the agents make use of the mobile phone technology and internet banking technology to connect to the server of the principal institution to carry out customer transactions. This model provides significant opportunity to reduce transaction cost such as travelling by clients to seek services in established branches. When MSEs uses technology to access financial products and services from traditional bank branches it confers on the users of the service, convenience, reliability and affordability. The usage of technology will make more people to be included in active financial systems without any discrimination. This study will focus on why a large number of micro and small enterprises are not yet using technology based financial products and services to transact with financial institutions using mobile phones and prepaid cards to access their bank accounts with very minimal travelling if any but in steady prefer travelling up to where the brick and mortar branches are located. According to Koivu (2002), an appropriate banking environment is considered a key pillar as well as an enabler of economic growth (Koivu 2002). In an environment with a continuously emerging wave of information driven economy, the banking industry in Kenya has inevitably found itself unable to resist technological indulgence. The need for convenient ways of accessing financial resources beyond the conventional norms has seen the recurrent expansion and modernization of banking patterns. According to Financial Sector Deepening Kenya (2010), the most recent data available indicates that only 19% of adult Kenyans reported having access to a formal, regulated financial institution while over a third (38%) indicated no access to even the most rudimentary form of informal financial service. This leaves a percentage of more than 80% outside the bracket of the reach of mainstream banking. The pent up demand for an affordable and reliable way of holding funds while ensuring that risk levels are consigned to a minimum is consistently unfolding. A system with the potential to obliterate the historical hurdles of cost and free access which have for a long time stood in the way of willing partakers of banking services evokes immediate attention and interest. The implementation of agent banking services in Kenya is a testament to this fact.
  40. 40. Agent Banking and Its Prospects in Bangladesh Literature Review Page | 32 According to the G20 Financial inclusion expert’s group report (2010), the member’s countries were committed to identify and assess key policy, regulatory and supervisory issues associated with new modes of financial service delivery to broaden and deepen access to and use of formal financial services. These issues includes electronic money, stored value instruments, retail payment systems, third party agent use, a diverse array of financial services like deposit taking, insurance, lending, payment services among others and financial services providers such as banks and non-banks, interoperable payment systems, financial capability like literacy, capacity and education, consumer protection, competition and other risk based approaches to promoting financial integrity This research will done to find the MSEs perceived suitability of the technology to meet their immediate needs especially after undergoing a financial literacy and education training equipping them with knowledge and skills on money management and technology based financial services available to them at a close range using agent banking. According to Kwon and Schumann (2005), have come up with many factors cited in the literature that motivate consumers to use internet banking including convenience, greater accessibility from a time and place viewpoint, time saving, compatible with past technology experience, ease of use, relative cheapness, improved service quality, and satisfactory personal experience with other banking technologies .reported that consumers are concerned about the confidentiality of personal information provided online and how banks may use this information. Other studies by Curran and Meuter (2005), however, have shown that the confidentiality element may act as a positive force so that feeling comfortable about providing personal information through electronic banking system positively influences adoption of internet banking. According to Wong and Chang (2005), studies on Other dimensions of risk, the results are also inconsistent with finding that consumers felt secure and safe conducting their banking on-line, believing that transactions will be handled correctly, thus leading to a very positive attitude towards on-line banking. According to Kaynak and Harcar (2005), the desire for personal face to face service has been identified as a key reason for consumers not using internet banking, however over 50% of respondents in a study indicated lack of face to face contact did not discourage them from adopting internet banking. Further, according to Curran and Meuter (2005), found that need for interaction did not predict attitude towards internet banking, while according to Durkin et al. (2003), the importance attached to face to face contact positively predicted the importance of using internet banking.
  41. 41. Chapter Four Findings & Analysis
  42. 42. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 34 4.1 Statistical Analysis This study was conducted on “Agent Banking and Its Prospects in Bangladesh: A Study on Bank Asia Ltd.” and the results are derived from the questionnaire which filled by customers of Agent Banking of Bank Asia Ltd. and others banks. When conducted this research, I found some important findings. Here, this study used SPSS (Statistical package for the social sciences) software to catch out the findings of this report. All the SPSS result sheets have to be converted into managerially understandable form. The analysis and findings are given in the following simultaneously: Table-4: Descriptive Statistics Descriptive Statistics N Mean Median Mode Std. Deviation Variance Knowledge 60 4.05 4.00 4 .699 .489 Satisfactions about Products Quantity 60 4.05 4.00 4 .649 .421 Products Comparison with Competitors 60 3.95 4.00 4 .946 .896 Products Satisfaction 60 3.68 4.00 4 .813 .661 Service Cost 60 2.75 3.00 3 .856 .733 Cost Comparison with Competitors 60 2.97 3.00 3 .802 .643 Hidden Charge 60 4.00 4.00 5 .957 .915 Proper Location 60 2.85 3.00 3 1.117 1.248 Agent Outlet In Market 60 4.15 4.00 5 .936 .875 Give Special Offers 60 2.88 3.00 3 .940 .884 Promotion 60 3.07 3.00 3 1.118 1.250 Accessibility 60 4.07 4.00 5 1.056 1.114 Transection Security 60 4.00 4.00 4 .781 .610 Brand value 60 3.25 3.50 4 .876 .767 Timely 60 3.40 3.00 3 .764 .583 Officials 60 4.43 5.00 5 .698 .487 Agents 60 4.18 4.00 4 .770 .593 Valid N 60 Source: Primary Data
  43. 43. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 35 4.1.1 Gender of Respondents Table-5: Gender Analysis Gender Frequency Percent Valid Percent Cumulative Percent Valid Male 49 81.7 81.7 81.7 Female 11 18.3 18.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figure-3: Gender Analysis Source: Primary Data Interpretation: From the above table and chart, it shows that 81.7 percent respondents are male and rest 18.3 percent respondents are female. It is also showing that the females are less interested to use banking services comparative to males.
  44. 44. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 36 4.1.2 Age Analysis Table-6: Age Analysis Age Frequency Percent Valid Percent Cumulative Percent Valid Bellow 21 5 8.3 8.3 8.3 21-25 17 28.3 28.3 36.7 26-30 19 31.7 31.7 68.3 31-36 16 26.7 26.7 95.0 Above 36 3 5.0 5.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figure-4: Age Analysis Source: Primary Data Interpretation: From the above table and chart, it shows that 8.3 percent respondents are under 21 years, 28.3 percent respondents are in between 21 to 25 years, 31.7 percent respondents are in between 26-30 years, 26.7 percent are in between 31-36 and the rest 5 percent are above 36 years old. So it is showing that the peoples from 26 to 36 years are using banking services mostly.
  45. 45. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 37 4.1.3 Profession Analysis Table-7: Profession Analysis Profession Frequency Percent Valid Percent Cumulative Percent Valid Student 16 26.7 26.7 26.7 Business 19 31.7 31.7 58.3 Service 13 21.7 21.7 80.0 Teacher 8 13.3 13.3 93.3 Others 4 6.7 6.7 100.0 Total 60 100.0 100.0 Source: Primary Data Figure-5: Profession Analysis Source: Primary Data Interpretation: Here, total respondents were divided into occupation. Occupation was divided into 5 groups as student, business, service holder, teachers, and others. From the Pie Chart, it is found that 26.7% respondents are students, 31.7% are businessperson, 21.7% are service holder, 13.3% are teachers, 6.7% are related with others occupation. It also shows that Business persons are the most users of baking services.
  46. 46. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 38 4.1.4 Account Related Analysis Table-8: Account Related Analysis Do you have any account with Bank Asia Ltd. Frequency Percent Valid Percent Cumulative Percent Valid Yes 40 66.7 66.7 66.7 No 20 33.3 33.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-6: Account Related Analysis Source: Primary Data Interpretation: From the above table and chart, it shows that 66.7 percent respondents have account with agent banking of Bank Asia Ltd, and rest of the 33.3 percent respondents don’t have accounts with agent banking of Bank Asia Ltd. They may have account with others bank.
  47. 47. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 39 4.1.5 Knowledge About Products Table-9: Knowledge About Products You are well informed about the products and services of agent banking of Bank Asia Ltd. Frequency Percent Valid Percent Cumulative Percent Valid Disagree 1 1.7 1.7 1.7 Neutral 10 16.7 16.7 18.3 Agree 34 56.7 56.7 75.0 Strongly Agree 15 25.0 25.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-7: Knowledge About Products Source: Primary Data Interpretation: From the above table and chart, it shows that 56.7 & 25 percent respondents are respectively agree and strongly agree with knowing about products which is positive for the banks.
  48. 48. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 40 4.1.6 Satisfactions about Products Quantity Table-10: Satisfactions about Products Quantity The products of agent banking of Bank Asia Ltd. are enough to satisfied customer needs. Frequency Percent Valid Percent Cumulative Percent Valid Neutral 11 18.3 18.3 18.3 Agree 35 58.3 58.3 76.7 Strongly Agree 14 23.3 23.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-8: Satisfactions about Products Quantity Source: Primary Data Interpretation: From the above table and chart, we can see that 58.3 & 23.3 percent respondents are respectively agree and strongly agree with satisfaction about products quantity which means that it has enough products to fulfill the need of the customers.
  49. 49. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 41 4.1.7 Products Comparison with Competitors Table-11: Products Comparison with Competitors The products of agent banking of Bank Asia Ltd. are more attractive comparative to others bank. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 1 1.7 1.7 1.7 Disagree 4 6.7 6.7 8.3 Neutral 10 16.7 16.7 25.0 Agree 27 45.0 45.0 70.0 Strongly Agree 18 30.0 30.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-9: Products Comparison with Competitors Source: Primary Data Interpretation: From the above table and chart, it shows that 45 & 30 percent respondents are respectively agree and strongly agree with The products of agent banking of Bank Asia Ltd. are more attractive comparative to others bank.
  50. 50. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 42 4.1.8 Products Satisfaction Table-12: Products Satisfaction You are satisfied with the products and services of agent banking of Bank Asia Ltd. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 1 1.7 1.7 1.7 Disagree 4 6.7 6.7 8.3 Neutral 14 23.3 23.3 31.7 Agree 35 58.3 58.3 90.0 Strongly Agree 6 10.0 10.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-10: Products Satisfaction Source: Primary Data Interpretation: From the above table and chart, we can see that 58.3 percent respondents are agree to satisfaction about products which should be improved.
  51. 51. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 43 4.1.9 Service Cost Table-13: Service Cost The cost for the services of agent banking of Bank Asia Ltd. are reasonable. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 3 5.0 5.0 5.0 Disagree 20 33.3 33.3 38.3 Neutral 28 46.7 46.7 85.0 Agree 7 11.7 11.7 96.7 Strongly Agree 2 3.3 3.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-11: Service Cost Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents think that the cost of the services is not reasonable.
  52. 52. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 44 4.1.10 Cost Comparison with Competitors Table-14: Cost Comparison with Competitors The cost of services of agent banking of Bank Asia Ltd. are lower comparative to the other competitors. Frequency Percent Valid Percent Cumulative Percent Valid Disagree 19 31.7 31.7 31.7 Neutral 25 41.7 41.7 73.3 Agree 15 25.0 25.0 98.3 Strongly Agree 1 1.7 1.7 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-12: Cost Comparison with Competitors Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents think that the cost of services of Agent banking of Bank Asia is higher or same as others bank.
  53. 53. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 45 4.1.11 Hidden Charge Table-15: Hidden Charge There has no hidden charge of agent banking of Bank Asia Ltd. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 1 1.7 1.7 1.7 Disagree 1 1.7 1.7 3.3 Neutral 18 30.0 30.0 33.3 Agree 17 28.3 28.3 61.7 Strongly Agree 23 38.3 38.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-13: Hidden Charge Source: Primary Data Interpretation: From the above table and chart, we can see that most of the respondents thinks that Agent banking of Bank Asia has no hidden charge.
  54. 54. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 46 4.1.12 Proper Location Table-16: Proper Location The location of the agent point of agent banking of Bank Asia Ltd. are in proper places. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 7 11.7 11.7 11.7 Disagree 16 26.7 26.7 38.3 Neutral 21 35.0 35.0 73.3 Agree 11 18.3 18.3 91.7 Strongly Agree 5 8.3 8.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-14: Proper Location Source: Primary Data Interpretation: From the above table and chart, it shows that Most of the respondents are thinking that the location of the agent’s points is not in proper places.
  55. 55. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 47 4.1.13 Agent Outlet in Market Table-19: Agent Outlet in Market Agent banking of Bank Asia Ltd. is needed to set up its agent outlet in the market rather than Union Parishad. Frequency Percent Valid Percent Cumulative Percent Valid Disagree 4 6.7 6.7 6.7 Neutral 10 16.7 16.7 23.3 Agree 19 31.7 31.7 55.0 Strongly Agree 27 45.0 45.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-15: Agent Outlet in Market Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents are strongly agree with the statement that the agent outlet should be in the market rather than Union Parishad.
  56. 56. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 48 4.1.14 Give Special Offers Table-20: Give Special Offers Agent banking of Bank Asia Ltd. gives special offers usually. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 8 13.3 13.3 13.3 Disagree 6 10.0 10.0 23.3 Neutral 31 51.7 51.7 75.0 Agree 15 25.0 25.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-16: Give Special Offers Source: Primary Data Interpretation: From the above table and chart, it shows that 51.7 percent respondents are neutral in this statement which means that they can’t defined their position in this statement.
  57. 57. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 49 4.1.15 Promotion Table-21: Promotion The advertising and promotion of Agent banking of Bank Asia Ltd. is better than the competitors. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 6 10.0 10.0 10.0 Disagree 12 20.0 20.0 30.0 Neutral 19 31.7 31.7 61.7 Agree 18 30.0 30.0 91.7 Strongly Agree 5 8.3 8.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-17: Promotion Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents thinks that the promotion is not enough.
  58. 58. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 50 4.1.16 Accessibility Table-20: Accessibility The online system of Agent banking of Bank Asia Ltd. is easily accessible. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 2 3.3 3.3 3.3 Disagree 3 5.0 5.0 8.3 Neutral 10 16.7 16.7 25.0 Agree 19 31.7 31.7 56.7 Strongly Agree 26 43.3 43.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-18: Accessibility Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents are agree with the statement that the system is easily accessible.
  59. 59. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 51 4.1.17 Transection Security Table-21: Transection Security The transaction system of Agent banking of Bank Asia Ltd. is very much secured. Frequency Percent Valid Percent Cumulative Percent Valid Neutral 18 30.0 30.0 30.0 Agree 24 40.0 40.0 70.0 Strongly Agree 18 30.0 30.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-19: Transection Security Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents are agree with the statement that the transaction system is very much secured.
  60. 60. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 52 4.1.18 Brand value Table-22: Brand value The brand value of Agent banking of Bank Asia Ltd. is much better than the competitors. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 2 3.3 3.3 3.3 Disagree 11 18.3 18.3 21.7 Neutral 17 28.3 28.3 50.0 Agree 30 50.0 50.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-20: Brand value Source: Primary Data Interpretation: From the above table and chart, we can see that 50 percent of the respondents are agree with the statement that the brand value of Agent banking of Bank Asia is higher than the competitors, others oppose.
  61. 61. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 53 4.1.19 Timely Table-23: Timely The service delivery time of Agent banking of Bank Asia Ltd. is very much reasonable. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Disagree 1 1.7 1.7 1.7 Disagree 4 6.7 6.7 8.3 Neutral 28 46.7 46.7 55.0 Agree 24 40.0 40.0 95.0 Strongly Agree 3 5.0 5.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-21: Timely Source: Primary Data Interpretation: From the above table and chart, we can see that 40 and 5 percent of the respondents respectively are agree and strongly agree with the statement that service delivery time is reasonable but others oppose.
  62. 62. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 54 4.1.20 Officials Table-24: Officials The bank officers of Agent banking of Bank Asia Ltd. are very much helpful. Frequency Percent Valid Percent Cumulative Percent Valid Disagree 1 1.7 1.7 1.7 Neutral 4 6.7 6.7 8.3 Agree 23 38.3 38.3 46.7 Strongly Agree 32 53.3 53.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-22: Officials Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents are agree and strongly agree with the statement that the bank officers are very much helpful.
  63. 63. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 55 4.1.21 Agents Support Figures-25: Agents Support The agents of Agent banking of Bank Asia Ltd. are very much supportive and transparent in banking transection. Frequency Percent Valid Percent Cumulative Percent Valid Disagree 1 1.7 1.7 1.7 Neutral 10 16.7 16.7 18.3 Agree 26 43.3 43.3 61.7 Strongly Agree 23 38.3 38.3 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-23: Agents Support Source: Primary Data Interpretation: From the above table and chart, it shows that most of the respondents think that the agents are very much supportive and transparent in their banking transaction.
  64. 64. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 56 4.2.22 Prospects of Agent Banking Table-26: Prospects of Agent Banking Agent banking will run effectively and efficiently in future and the growth will be high. Frequency Percent Valid Percent Cumulative Percent Valid Neutral 6 10.0 10.0 10.0 Agree 30 50.0 50.0 60.0 Strongly Agree 24 40.0 40.0 100.0 Total 60 100.0 100.0 Source: Primary Data Figures-24: Prospects of Agent Banking Source: Primary Data Interpretation: From the above table and chart, it shows that 50 & 40 percent respondents are respectively agree and strongly agree with the statement that the prospects of agent banking in Bangladesh will be bright and the growth will be high.
  65. 65. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 57 4.2 KMO and Bartlett's Test Table-27: KMO and Bartlett’s Test KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .785 Bartlett's Test of Sphericity Approx. Chi-Square 530.85 9 df 136 Sig. .000 Source: Statistical Data Analysis KMO test result is .785 (More than 0.70). So, collected data are suitable for factor analysis. 4.3 Rotated Component Matrix Table-28: Rotated Component Matrix Factors Description Factor Loading % of Variance Factor 1 Reliability 34.799 Products Satisfaction .630 Hidden Charge .725 Agent Outlet In Market .804 Agents .734 Factor 2 Place and Promotion 13.921 Proper Location .863 Give Special Offers .820 Promotion .821 Factor 3 Products 8.068 Knowledge .502 Satisfactions about Products Quantity .815 Products Comparison with Competitors .427 Timely .663 Factor 4 Service 7.208 Service Cost .685 Accessibility .410 Brand value .813 Factor 5 Trustworthy 6.522 Cost Comparison with Competitors .802 Transection Security .305 Officials .324 Source: Statistical Data Analysis
  66. 66. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 58 Interpretation:  Reliability (Factor 1) contained four statements/attributes and explained 34.799% of the variance in the data and statements/attributes with factor loadings greater than 0.30. These factors were Products Satisfaction, Hidden Charge, Agent Outlet in Market, Agents.  Place and Promotion (Factor 2) accounted for 13.921% of the variance, and statements with factor loadings greater than 0.30. This factor was loaded with three statements. These were Proper Location, Give Special Offers, Promotion.  Products (Factor 3) includes four statements and accounted for 8.068% of the variance, statements with factor loadings greater than 0.30. These attributes were Knowledge, Satisfactions about Products Quantity, Products Comparison with Competitors, Timely.  Service (Factor 4) contained three statements and accounted for 7.208% the variance, and statements with factor loadings greater than 0.30. These statements were Feel to be Service Cost, Accessibility, Brand value.  Trustworthy (Factor 5) include three statements and explained 6.522% of variance in the data, and statements with factor loadings greater than 0.30. These statements were Cost Comparison with Competitors, Transection Security, Officials. 4.4 Multiple Linear Regression Analysis Multiple Linear Regression Analysis was performed to assess whether the identified independent variables exerted a significant influence on dependent variable. To predict the goodness-of-fit of the regression model, the correlation coefficient (R), t-value, standardized coefficient (Beta), unstandardized coefficient (B) and F ratio were examined. The equation of the conceptual model was expressed in the following: Equation: Y = α + β1X1 + β2X2+ β3X3+ β4X4+ β5X5 Where, Y = Prospects of Agent Banking X1 = Reliability X2 = Place and Promotion X3 = Products X4 = Service X5 = Trustworthy And α is constant and β1, β2, β3, β4, and β5 are coefficient to estimate.
  67. 67. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 59 5.5 Model Summary 𝐻0: β =0 𝐻1: β ≠0 𝐻0: There is no Positive attitude towards agent banking in Bangladesh. 𝐻1: There is a Positive attitude towards agent banking in Bangladesh. Table-29: Model Summary Model Summary Mode l R R Square Adjusted R Square Std. Error of the Estimate 1 .581a .337 .276 .549 a. Predictors: (Constant), Trustworthy, Service, Products, Place and Promotion, Reliability Source: Statistical Data Analysis Interpretation: For the analysis of the data set SPSS 20 were used. The following results has attained after inserting the multiple linear regression. R =.581 indicate the model is fit. In the table, adjusted R-Square is showing that the Dependent variable (Prospects of Agent Banking) is influenced 33.7 % by independent variables (Trustworthy, Service, Products, Place and Promotion, and Reliability). Since R Square is .276. So the error of the estimation is .549. 4.6 ANOVA Analysis of variance (ANOVA) is a collection of statistical models used in order to analyze the differences between group means and their associated procedures. In its simplest form, ANOVA provides a statistical test of whether or not the means of several groups are equal. The ANOVA test is the initial step in identifying factors that are influencing a given data set. Table-30: ANOVA ANOVAa Model Sum of Squares df Mean Square F Sig. 1 Regression 8.301 5 1.660 5.500 .000b Residual 16.299 54 .302 Total 24.600 59 a. Dependent Variable: Agent banking will run effectively and efficiently in future and the growth will be high. b. Predictors: (Constant), Trustworthy, Service, Products, Place and Promotion, Reliability Source: Statistical Data Analysis
  68. 68. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 60 Interpretation: The ANOVA explained that overall model was significant. Here, the sig. value is 0.000, which is less than 0.05, and indicates that the model is statistically significant. It is clear that all the independent Variables (Trustworthy, Service, Products, Place and Promotion, and Reliability) are connected to the dependent variable (Prospects of Agent Banking). So, the model is fit for regression. 4.7 Coefficient of Variance Table-31: Coefficient of Variance Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 4.300 .071 60.626 .000 Reliability .165 .072 .256 2.308 .025 Place and Promotion -.048 .072 -.075 -.673 .504 Products .186 .072 .289 2.607 .012 Service .089 .072 .138 1.244 .219 Trustworthy .262 .072 .405 3.657 .001 a. Dependent Variable: Agent banking will run effectively and efficiently in future and the growth will be high. Source: Statistical Data Analysis So, Y = α + β1X1 + β2X2+ β3X3+ β4X4+ β5X5 = 4.3 + .165 (Reliability) −.048 (Place and Promotion) + .186 (Products)+ .089 (Service)+ .262 (Trustworthy) Since significance value for Reliability is .025 which is less than 0.05, so there is less error on this variable and positive relationship with dependent variable. Significance value for Place and Promotion is .504 (More than .05), So this is a less significant variable which influence the dependent variable negatively. Significance value for Products is less than 0.05, so there is less error on this variable and positive relationship with dependent variable. Significance value for service is .219 (More than 0.05), so it has less significance but has positive relationship with dependent variable. Significance value for Trustworthy is less than 0.05, so there is less error on this variable and positive relationship with dependent variable.
  69. 69. Agent Banking and Its Prospects in Bangladesh Findings & Analysis Page | 61 Among all variables, Trustworthy is the major variable with Unstandardized coefficient β1= .262 that can contribute most to the prospects of Agent Banking in Bangladesh. All independent variables have positive relation with dependent variable except the variable place and promotion. 4.8 Findings of The Study The major findings of the survey are given bellow:  The male people are mostly use banking services comparative to females. According to the profession, the businessman, service holders and students are the most users of banking services.  Most of the people are not aware of the products and services of agent banking of Bank Asia Ltd. Most of them don’t know what agent banking is!  Peoples think that the agent banking products are enough to satisfy their needs. Peoples also thinks that the products of agent banking of Bank Asia Ltd. are more attractive than the competitors. They are also satisfied with the services of agent banking of Bank Asia Ltd.  The cost of the services is not reasonable but comparative to others it is less than the competitors. People believe that there is no hidden charge in Bank Asia’s agent banking.  The most negative thing is that the location is not in proper places. These should be in market rather than in Union Parishad because most of the time the Union Parishad is in a remote place where there is no market nearby. Reality says that these should be in the market rather than Union Parishad.  The advertising and promotion is not enough to reach people. They should give more and more advertising in TV, Radio, Paper etc. to reach people more quickly. They should take different promotional program to reach people vastly.  The agent banking site is easily accessible and informative but the server is weak.  The transaction system is very much secured because it uses fingerprint of both the customer and agents in every transaction.  The brand value of Bank Asia is not higher than the competitors but they agent banking in Bangladesh for first time.  It takes much time in the transaction for server problems, shortage of appropriate knowledge about the activity, and sometime the less understanding power of the agents etc.  Peoples think that the bank officers and the agents are very much supportive and the transparency in transaction of the agents are very much satisfactory.
  70. 70. Chapter Five Recommendations & Conclusion
  71. 71. Agent Banking and Its Prospects in Bangladesh Recommendations & Conclusion Page | 63 5.1 Recommendations Agent Banking of Bank Asia is the pioneer of agent banking in Bangladesh. It starts agent banking in Bangladesh with a pilot program in Munshigonj in 2014. So it is very much young according to its age. So there are a lot of problems now. But Bank Asia is trying to decrease the problems by upgrading the system day by day. The recommendations for them to overcome the problems in Agent Banking are as follows:  The agents of the agent banking of Bank Asia Ltd. should be given enough training to learn the whole system of transection and activity.  The Transaction limit should be enhanced to give banking facilities properly specially for the business persons.  The server of the bank should be made fast, so that they activity will be quickly done.  They should request Bangladesh bank to sit with the mobile phone operator, Ministry of ICT, and The Bangladesh Telegraph Telephone Board (BTTB) to enhance 3G facility to the Union stage or provide broadband facility to the Union Parishad for faster data transmission.  The bank officers should be trained properly before sending them in the workplace.  Bank should take advertising and promotion program to reach the people quickly and largely, make them keeping faith and make them knowing about the products and services of it.  Bank should take those as agents who are at least graduate or have completed HSC.  As the agents who run their business in Union Parishad remain too busy with the work of Union Parishad, so they should not be taken as agents.  In most cases the agents are not so much solvent to run the business, but it requires much capital investment. So when taking any agent bank should justify his solvency.  Bank should motivate agents about their (A) business. They should make understand about their future in realistic way.  Bank Asia should provide a minimum commission to the agents for account opening or feeling up the account form. This will increase the interest of the agents about opening of account.  The most negative thing is that the location is not in proper places. These should be in market rather than in Union Parishad because most of the time the Union Parishad is in a remote place where there is no market nearby. Reality says that these should be in the market rather than Union Parishad.  Bank should take awareness program to reach the people and communicate them about agent banking products and services.  Bank should give special offers for the customers as well as the agents. This will increase the interest of the customers as well as the agents.
  72. 72. Agent Banking and Its Prospects in Bangladesh Recommendations & Conclusion Page | 64  The service charge as account maintenance charge, charge of deposit and withdraw in other agent outlet or branches, charge of EFTN, fund transfer etc. of banks should be decreased.  The branding elements should be reached immediately to the agents. Before branding people can’t hold faith in it. They are in a confusion that their money might be theft. 5.2 Conclusion Agent banking has a huge possibility in Bangladesh. Few banks are taking different initiatives to make this service popular in Bangladesh. Banks like Bank Asia, NRBC Bank, Al-Arafah Islami Bank, Dutch Bangla Bank, UCBL, Eastern Bank Limited, ONE Bank Limited, Farmers Bank have already launched agent banking and many more are waiting to get clearance from Bangladesh Bank. This service opens the separate epoch for accessible banks and financial institutions. More and more people will use this service because of the convenience it will provide to them in their daily life. Bangladesh bank has proper guideline and policies for agent banking; now the banks have to be very vigilant employing those policies to make it the biggest triumph story. As most of the people are living in the village so it has much scope to take them into the banking system and prolong the banking business in Bangladesh. The economy of the country will also have a positive impact through this. Bank Asia is the pioneer in the agent banking in Bangladesh so it has much scope to capture the whole market in a short time. It should overcome the major problems and take necessary steps to catch the whole market. It has capability to be succeed in this sector. In conclusion I must say that this report is really essential for every student of business studies to get idea about Agent Banking sector of Banking in Bangladesh. By completing this report, I have got overall idea of Agent Banking sector. Bank Asia was really a good experience for me because every person of there were so much helpful. So, at last, there is a hope that the growth of Agent Banking will be high, future will be bright and it will be much popular in a very short time.
  73. 73. References
  74. 74. Agent Banking and Its Prospects in Bangladesh References Page | 66 Md. Razib Siddiquie, “Agent banking: the revolution in financial service sector of Bangladesh” IOSR Journal of Economics and Finance (IOSR-JEF) e-ISSN: 2321- 5933, p-ISSN: 2321-5925.Volume 5, Issue 1. (Jul-Aug. 2014), PP 28-32 Nefa Chiteli, “Agent Banking Operations as a Competitive Strategy of Commercial Banks in Kisumu City” International Journal of Business and Social Science Vol. 4 No. 13; October 2013. Masila Christopher kitali, “The impact of agent banking on customer satisfaction” (June, 2015) Nkiru Patricia-Nezianya & Daniel Izuchukwu, Impact of Agent Banking on Performance of Deposit Money Banks in Nigeria (2014) Mirza Sami Adib, (2016) “Agent Banking and Its Prospects in Bangladesh” Clara Veniard, “How Agent Banking Changes the Economics of Small Accounts” (November 2010) Fred Gichana Atandi, (2015) “Challenges of agent banking experiences” Ansoff, I. McDonnell, “Implanting Strategic Management in Great Britain; Prentice Hall Europe”, E. (1990) Aosa, “An Empirical Investigation of Aspects of Strategy Formulation and Implementation with large”, E. (1992) Awino Z., Wandera W., Imaita I., Obonyo P K., (2009) “Challenges Facing The Implementation Of Differentiation strategy at The Mumias Sugar Company Limited”. Barney. Jay B. (2001), Firm resources and Sustained Competitive Advantage: Journal of Management, pp. 99-120. Clara Veniard, Bill and Melinda Gates (2010) “How agent banking changes the economics of small accounts” Cooper, R.D. and Schindler, S.P. (2003), Business Research Methods, 8th Edition, Boston: McGraw Hill Center for Promoting Ideas, USA www.ijbssnet.com , p: 319 Dess, G.G. and Robinson, R.RB. Jr (1984) in Allen, R.S. and Helms, M.M. (2006) “Linking Strategic Practices and Organizational Performance to Porters Generic Strategies” Business Process Management Journal, 12(4), pp. 433-454.
  75. 75. Agent Banking and Its Prospects in Bangladesh References Page | 67 Frazier, G.L., Howell, R.D. (1983) in Allen, R.S. and Helms, M.M. (2006) Linking Strategic Practices and Organizational Performance to Porters Generic Strategies. Business Process Management Journal, 12(4), pp. 433-454. Gareth, J. &Charles, W. (2001), “Strategic Management Theory, New York, USA; Houghton Mifflin Company” Grant, R. M. (1998). Contemporary Strategic Analysis, Oxford, UK; Blackwell Publishers. Goliath, S W (2004) The Identification of Competitive Strategies That PPC Cement Could Use Within the Eastern Cape Border Segment to Maintain Its Market Share. Harper, Malcolm, and Marie Kirsten (2006) “ICIC Bank and microfinance Linkages in India.” Small Enterprise Development 17(1):30-39 Haines, S. G, Racine, R. &Ralf, M. (1995). Successful Strategic Planning. USA; Crisp Publications. Harper, R.I. & Chan, T. (2002). The future of Banking; A Global Perspective. London, UK: Greenwood Publishing Group. Hooley, G.I. and Lynch, J.E. (1985) in Allen, R.S. and Helms, M.M. (2006) Linking Strategic Practices and Organizational Performance to Porters Generic Strategies. Business Process Management Journal, 12(4), pp. 433-454. http://esi.mckinsey.com/en/knowledge by topic /General/bankpoor.aspx http://www.afi-global.org/en/policy-solutions/agent-banking http://www.centralbank.go.ke http://www.kcbbankgroup.com Johnson, G. & Scholes, K. (1999) Exploring Corporate Strategy: Texts & Cases. Great Britain: Prentice Hall, Europe. Kumar, Anjali, Ajai Nair, Adam Parsons and Eduardo Urdapilleta (2006) “Expanding Bank Outreach through retail Partnerships: Correspondent Banking in Brazil.” World Bank Working Paper No.85 Washington, D.C, World Bank Kothari C R (2004) Research Methodology – Methods & Techniques, USA, New Age International (P) Ltd Bangladesh Bank Annual Report (2016) Bank Asia Annual Report (2016)

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