The paradox about Bangladesh is that it has become one of the fastest growing economies in the world with half of its adults remaining financially excluded. Lack of sufficient fund, high cost of financial transaction and lack of banks’ dedication to offer diversified services are seen to be the major roadblocks for greater financial inclusion. Hence, they remain as the futile long-tail for the banks.

In Bangladesh, agriculture is the largest employment sector and most of the un-banked population are farmers by profession, living in the rural areas. So, the 36 million farmers are the financial outcasts who are living off the land, and without the ability to access credit, save, and secure their future.

United Commercial Bank (UCB), one of the biggest banks in Bangladesh, decided to bring a change in their outlook about the financially excluded ones and make the banking facilities approachable and accessible for them.

The farmers are the marginal producers who produce vegetables and fruits in limited area of lands and in smaller quantity which is not sufficient to be sold in the wholesale market. Also due to limitation in the storage facility, they are time-bound to sell these perishable items. The middlemen take advantage of this situation and buy the produce at a throwaway price. This highly impacts their income level and they stay stuck in the vicious circle of poverty. Due to the lesser amount of income, they can’t afford banking services and in time of need they have to take loans at an extremely high interest rate from informal sources. So, formal financial sectors remain unapproachable and inaccessible to 36 million farmers in Bangladesh.

The unbanked farmers don’t have enough cash to go to banks, but they grow fresh produce which are often yielded more than needed. However, the excess produce is more when it comes to individual families but insignificant to sell in the wholesale market. Therefore, those are generally sold at throwaway prices where the middlemen get benefited the most. So, we thought of solving both the issues i.e. lack of funds for the farmers and getting unfair prices for the excess produce, through one idea – AgroBanking.

AgroBanking is the world’s first gumption to transform fresh fruits and vegetables into bank accounts. It allows farmers to open micro savings accounts in exchange for their produce. The initiative is designed to enable farmers to build credit histories, amass savings and eventually become eligible for other benefits like loans.

The intent was to transform the lives of 36 million un-banked farmers. When asked, they said banks are far away from their residences and they don’t have enough cash to avail banking services. However, what they have as surplus is the fresh produce. As they don’t have favorable solutions available, these excess produce either get wasted or sold to middlemen at low prices where the middlemen get benefited, not the farmers. So, the strategy was to develop an Eco-system through which the farmers’ problem of not having enough cash will be solved and they will also receive fair price for their excess produce.

AgroBanking is that two-party platform where the currency to deposit into bank accounts is the fresh produce, not the typical hard cash. To convert the fresh produce into money, Shwapno, the largest retail chain was collaborated with, who already sources fresh produce from such marginal growers.

UCB doesn’t have full-branches in rural. But they have UCash (mobile financial service brand) agent points and UCB Agent Banking outlets in some of the villages. So, the idea was to set up co-branded points of UCB and Shwapno, at the UCash points or UCB Agent Banking points where available and in mobile vans where none of these are available. In that point, the fresh produce were collected by UCB and the equivalent amount of money was deposited into the farmer’s account. The farmer would get an SMS-notification and can keep record in the deposit book. One could also withdraw from account at that point. The price would be fixed every morning based on the rate in the wholesale market. Everyday Shwapno’s van would take the fresh produce to the nearest Shwapno outlet/s. A few weeks prior to the launch, megaphone announcements and posters were pasted in the implementing areas.

AgroBanking is the first-of-its-kind solution that solves the farmers’ problem of accessing banking services and getting fair price for their excess produce. Hence it created massive excitement among the farmers and general people of Bangladesh. Within weeks of its launch, 750 new accounts were opened and 58 tons of fresh produce were collected. Positive conversation has started happening on social media about the potential of this concept to reduce poverty. The initiative generated 40+ media impressions, garnering coverage worth of US$ 1.5 million with zero media spending till date. Though the project was initially launched in five points in one district, 115 more villages are showing interest and requesting UCB and Shwapno to start AgroBanking at their villages as well.