Access to finance must for unexpected needs: Experts

Getting access to finance and developing financial capability are crucial for people to face unexpected challenges like tackling the shocks of a disaster and medical expenses, experts said.

Sound financial health also gives people freedom and confidence as well as the ability to meet long-term financial commitments and make choices that improve the quality of life, speakers said at a webinar titled "Financial health: Thinking beyond financial inclusion" on Wednesday.

The webinar was the 4th episode of the series titled "Bangladesh Financial Inclusion 1.0," organised by Aspire to Innovate (a2i) with ACCESS Health International and The Business Standard. 

"To grow financial capability, people have to develop skills and knowledge. It will give them confidence as well as more security and mobility," said Adrienne Mendenhall, director of Business Development of Access Health International, while presenting a keynote paper at the webinar.

Citing a study, she said in Bangladesh, 65% of the healthcare expenses were paid out of pocket. To meet the expenses, 3.5% people go below the poverty level each year. Further, 14.2% of the households face catastrophic healthcare expenditure. 

Adrienne said one needed to assess his current net worth and achieve a balance between income and expenses to improve the financial health.  He has to build and maintain reserves with a plan, manage existing debts, and get access to potential resources.

Sunil Bhat, associate partner of MicroSave Consulting, said, "Financial health is a term used to describe the state of one's personal monetary affairs."

"Bringing an element of gender is very important in financial services. The private sector needs to think innovatively to make products affordable and appropriate for women."

"We need women agents and merchants to encourage female customers. Innovation is also crucial here. We need to develop apps which will have less data and more pictures and colors so that women can use it easily," he said.

Md Arfan Ali, president and managing director of Bank Asia, said, "Financial health empowers the people and gives them dignity.  But a suitable environment for the people to access the financial services is crucial. They have to feel secure first."

"More people have to be brought under financial services and the banks have to take the responsibility," said the banker.

Birendra Chandra Das, a joint-director of Bangladesh Bank, said, "We have taken a number of initiatives to bring people under financial services and inspire them to save money and take loans when needed."

"For greater access, we brought several innovative measures and digitalised the services," he said.

Saying that Bangladesh is heading to its goals but missing some things, Krishna Thacker, director (Asia) of Metlife Foundation, emphasised proper understanding of the system and design to make further progress in financial inclusion.

Dr Atiur Rahman, chairperson of Unnoyon Shamannay, emphasised long-term measures for financial health.

Dr Atiur, also a former Governor of the Bangladesh Bank, said the central bank had been coming up with new products like mobile financial services and agent banking. The number of people who receive these services is not big, but it is rising.

"There is no doubt the country is moving on, but it is making some mistakes. However, it is learning and gathering knowledge from each mistake," he said. 

"The central bank is also monitoring the issue of universal health coverage (UHC), but a multilateral approach is needed for this and the central bank has the ability and efficiency to make all stakeholders active to gain UHC," he continued.

The webinar is moderated by Anir Chowdhury, policy advisor of a2i.