State and potential of digital financial services among farmers in Bangladesh: An in-depth study

Abstract

Technologies like digital mobile services have a greater role in societies, particularly among agricultural communities for financial transactions. Keeping this in mind, the current study investigated the present status and potential of digital financial services (DFS) among farmers in Bangladesh. A total of 400 farmers were interviewed directly through a random selection to assess the present status and conducted 30 KIIs for potential. The study utilized a mixed-method approach, incorporating quantitative analysis via the Relative Importance Index (RII) and qualitative analysis through transcriptions. It was found that 87.3% of the farmers use DFS, with bKash being the most popular platform. However, the use of DFS was relatively limited when it comes to farm transactions. In case of farm's electricity bill payments, the number of responses was higher compared to other items. Furthermore, the study highlighted that farmers have lower satisfaction level with DFS than cash in case of farm transactions. This is due to the fact that farmers perceive using DFS for financial transactions as very difficult, which is compounded by a lack of knowledge on PIN changes (70.5%) and familiarity with terms and conditions (72%). Additionally, 42.86% of farmers reported experiencing scams, a higher prevalence compared to other issues. In such instances, farmers lodged complaints with agents but did not receive satisfactory resolutions. Therefore, the study suggests to implement user-friendly DFS interfaces tailored for agricultural use, initiate farmer-focused financial literacy programs, enforce robust security measures, and establish a regulatory framework for DFS integration into agriculture.

Keywords

• Digital financial services
• Farmers
• Satisfaction
• Potential
• Bangladesh