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Navigating Personal Finance Strategies for Enhanced Financial Stability
In these cases, investing in assets or addressing immediate needs—such as personal expenses, purchasing a car or home, business investment, or debt consolidation through installment loans—can be effective strategies.
Banks and NBFIs also offer loans that are often linked to specific savings products such as Fixed Deposit Receipts (FDRs), Deposit Pension Schemes (DPSs), or other savings accounts.
Debt consolidation, a useful strategy for individuals aiming to manage their debts more effectively, requires careful planning and an understanding of individual financial circumstances. Financial institutions often recommend a tailored repayment plan based on customers’ current debt conditions. “To assist customers in managing and consolidating their debt, we have Relationship Managers (RMs) stationed at both our head office and branch locations, dedicated to providing personalized service and financial counseling,” said Syed Mahbubur Rahman, Managing Director & CEO of Mutual Trust Bank Limited.
Dr. Md. Main Uddin, Professor & Director, Department of Banking and Insurance, however, said, “often these services are inaccessible to lower-income people and marginalized individuals due to the unfavorable arrangement of conventional banks and NBFIs.”
Mobile Financial Services (MFS) have added new features to the landscape of personal finances, creating opportunities for women, the lower-middle class, and marginalized communities to save with less hassle than conventional banking. Through using bKash, anyone can build their savings weekly and monthly with minimal effort. There are monthly and weekly savings schemes, also known as DPS, offered by four commercial banks and a financial institution—BRAC Bank, Dhaka Bank, Mutual Trust Bank, City Bank, and IDLC Finance—on bKash’s platform.
“Since its inception, financial inclusion has remained a core vision of bKash as it connected millions of unbanked and underbanked people with the formal economy. To facilitate a large user base of 75 million customers, bKash introduced a range of necessary financial products that are innovative, easy to use, and secure,” said Shamsuddin Haider Dalim, Head of Corporate Communications and PR at bKash.
Appreciating this approach, Dr. Main Uddin highlighted the need to mitigate challenges associated with digital literacy and digital divide.
PATHWAYS FOR ADVANCEMENT
A key challenge in managing personal finances is determining the optimal allocation of financial resources. The choice of whether to invest in a current account, savings account, savings certificate, treasury bond, mutual fund, or fixed deposit depends on an individual’s financial knowledge and personal circumstances.
“Globally, bankers frequently take on the role of financial planners. Since many customers lack expertise in financial planning, it becomes the bankers’ responsibility to develop plans that address their needs. However, this approach is not yet fully implemented in Bangladesh. If bankers can embrace the role of financial planners, it could significantly improve money management for individuals across all sectors of society,” said Khondoker Imran Hossain, Junior Assistant Vice President, Retail Distribution Division, Midland Bank.
Echoing Imran Hossain, Khurshed Alam, Head of Retail Financial Services, LankaBangla Finance, said, “Although our market is not developed enough to nurture personal finances comprehensively, Bangladesh Bank (BB) has been working on various initiatives to popularize it. If plans can be implemented successfully, we can hope to see the reflection within five years.”
On this note, Al-Mamun Ansar, Head of Liability Business, Liability & Wealth Management of EBL, highlighted the children’s financial schemes by the BB. “If a person can be taught about the importance of personal finances in childhood through having an account and control over it to manage the money, they will gain firsthand experience in personal resource management. This learning will definitely reflect in their future life,” added Al-Mamun.
“Our financial sector is predominantly focused on lending, but enhancing savings by including all segments of society is crucial for capital formation and overall economic growth. Therefore, it is essential to popularize saving schemes through continuous campaigns, as they are a core component of personal finance,” highlighted Prof. Main Uddin of Dhaka University.
Experts believe that a comprehensive approach involving all stakeholders is essential for advancing the overall development of the personal finance landscape in Bangladesh.
Our financial sector is predominantly focused on lending, but enhancing savings by including all segments of society is crucial for capital formation and overall economic growth. Therefore, it is essential to popularize saving schemes through continuous campaigns, as they are a core component of personal finance.