The encyclopedia · Finance & Accounting · Strategic decision · 2011–2014
bKash turned Bangladesh's corner-shop airtime sellers into its branch network
A standalone mobile-money firm turned 80,000 airtime shops into branches and reached 11 million accounts in 30 months.
bKash Limited
the move
bKash launched in Bangladesh in the second half of 2011 as a standalone company owned 51% by BRAC Bank, with Money in Motion (Iqbal and Kamal Quadir, Nick Hughes and Arun Gore) holding the rest. It was neither a telco with an existing customer base nor a bank with branches, so it had to acquire every client itself.
Its answer was distribution. In year one it used 5,000 agents recruited through BRAC, then switched to direct recruitment of more than 100 regional distribution companies whose shops already sold airtime, FMCG, medicine and groceries. Airtime resale margins had fallen to historic lows by 2012, so resellers were hungry for a new revenue line, and the agent network surged toward 80,000 in two years.
Regulation helped: Bangladesh Bank licensed a bank subsidiary, kept BRAC Bank responsible for compliance, and pushed all four mobile operators to open USSD access, giving bKash reach to 98% of the country's mobile subscriptions. By December 2013 bKash had 11 million registered accounts, was processing about $680 million a month, and carried more than 80% of Bangladesh's mobile-financial-service transactions.
why it works
- Distribution was the real barrier, and the airtime trade already had the shops, cash handling and customer trust.
- A standalone company focused on transactions and fees instead of a bank's balance sheet.
- Open USSD from all four operators removed the telco-captive ceiling at launch.
- Agents were recruited as businesses with commissions, not as employees, so the network scaled on its own incentives.
what transfers
When branches are the bottleneck, don't build them: recruit the most ubiquitous retail network and hand its owners a new product to sell.
what came after
By the end of 2013, 22% of Bangladesh's adults used mobile financial services and bKash was, by CGAP's estimate, the fastest-growing mobile-money business globally that year. IFC and the Bill & Melinda Gates Foundation joined as minority investors in 2013-2014. bKash stayed the dominant rail for person-to-person transfers, though the World Bank brief noted it still needed to move users from agent-assisted transactions to their own wallets.
references
- bKash Bangladesh: A Fast Start for Mobile Financial Services
- bKash Bangladesh: What Explains its Fast Start?
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