Author: Asif Tarafdar

A Promise of Protection

Having spent close to three decades in the sector, you are a veteran of the industry, when did you join Guardian, was that a new leaf in your career, did you want to do anything differently?
When I joined the insurance industry back in 1991, I had no notion of what I could do to contribute to it, and how long I would sustain here. Through the guidance of my mentors, I began to understand that this is a very vital industry for sustainable development of the economy, and also to bring social safety at large. To get a better understanding of the industry, I devoted myself to expanding my knowledge and focused on delivering service that customers expect from this industry. By the time I joined GLIL, I had accumulated two and a half decades of experience. My aspiration has always been to deliver the best customer service, which became a challenge at some point. Doing something outstanding and challenging the status quo is not easy and I was at a certain plateau of my career where I really wanted to dream big. When Guardian Life approached me, they gave me a good understanding of their vision with the company. It is a Company-sponsored by Apex, BRAC and Square Group, who have a very long track record of their commitment and ethical business practice in Bangladesh. They also conveyed that they aim to brand Guardian Life as one of the trusted life insurance company operated via ethical practice. I soon realized that this is the opportunity for me to materialize my dream, which was a major factor for consideration while joining Guardian Life.

Throughout your experience, how do you think the sector has evolved, and do you believe that our consumers match up to the idea of insurance?
Looking back at how the insurance industry has evolved, it becomes clear that we have not been able to bring much change to people’s minds in terms of service. It was primarily due to misconceptions. By 1985, we had only one nationalized company and a severe lack of professionals in the industry. By the nineties, two or three more companies got approval who had the intention to create quality executives. Before they could realize that intention, 12 other companies came into the market in 2000 which resulted in further demand along with shortfall of talented people. However, 2000 was a turning point for this industry, business was good, although the potential market was much bigger. Insurance is a long term business, and the premium we collect is a liability. The money belongs to the people, not the company, so it must be used judicially to meet future commitments. Eventually, the money has to reach the policyholders.

A problem we face is peoples’ misconception of insurance companies not being managed well. I often hear complaints from customers that they are not getting their money back at maturity. At a bank, when the FDR gets matured, customers get the cashback on the same day or the following day. In the insurance industry too, the fund disbursement takes very less time for the reputed & weel-managed companies. However, for the rest, it usually takes much longer to get disbursed. It is mainly because the money was diverted in different units, and the cash flow was not appropriately maintained.
The other issue is the customers’ lack of knowledge about finances and the industry as a whole. Generally, people tend to compare insurance companies with banks, although philosophy is different between the two. We have to inform the customers of the difference, such as when investing money in insurance, they cannot withdraw from it whenever they want. Instead, it is a long term investment for their future; but usually, customers surrender their policy prematurely, resulting in them not getting their full money back. To change this practice, we are encouraging the government bodies to include a subject or paper on financial knowledge in the national curriculum. The aim is to create a way to educate people on various investment alternatives, not only in insurance companies but also in banks. The idea is to make people understand the importance of insurance and its role in securing one’s future.

Customer centricity is also of paramount importance for Guardian Life. We launched the first 24×7 call center in the industry back in 2018 and still now we are the only one in the whole industry. Our call center short code is 16622.

What do you believe is the most crucial challenge the insurance sector is facing?
Currently, the major channel of distributing insurance is via agents & agencies. Insurance is not a consumer good, it is a service that usually needs a bit of persuasion. We use our field force, agents who have been trained to recognize prospective customers. After making appointments, they convey the benefits of the product adequately, analyze all the information, and eventually sell the product. In recent times, due to time constraints, it isn’t straightforward to set up appointments with clients as they have become very busy. As a solution, we are advocating the government to permit corporate agents like banks and NGOs to sell insurance i.e. Bancassurance. Our current regulatory board, Insurance Development & Regulatory Authority Bangladesh (IDRA), along with Bangladesh Bank, are seriously considering it. We are expecting the channel to come up sometime within next year. We are also hoping for some policy changes by the government to promote insur-tech. There need to be some regulatory changes to make the process more efficient.

Currently, upon policy purchase, we need to send the documents back to the customer to get a wet signature, this process is very inefficient. We also have to affix BIMA stamp on the policy documents. The documents are available online, but the entire process is not 100% digital yet. Also, the KYC that has been issued by the central bank is very complicated, which discourages customers. Consequently, people usually get frustrated and give up. So, we are encouraging the government to introduce eKYC. The operation will have the same user-friendly feature as BKash, enabling people to buy a policy with the swipe of a finger.

We have already graduated from the list of LDCs. How crucial would be the role of financial inclusion for our country?
Regarding financial inclusion, currently, around 45-50% of the population has got banking access. Insurance companies cover people both banked & unbanked. People outside the banking system show more interest in insurance products and want to open an account and make regular deposits. Most of them are micro-insurance or rural insurance, which is now the main focus of insurance companies. The unbanked population is the major focus area now. As a result, the bank and the insurance companies are complementing each other for financial inclusion.

How will this benefit the banked population?
Whenever a family loses a member who earns an income that goes towards supporting the family, it affects them negatively, insurance works as a safety net in this scenario. Likewise, if this member becomes unable to support the family due to disability, the insurance company steps up to provide the financial support instead. Insurance benefits ensure social safety. It is the most virtual strength of insurance, to bring social stability and enable smooth growth of the society.

To cater to this special segment, we have launched the first Life Insurance App of Bangladesh, namely EasyLife. Primarily, we started off with a term life insurance product and then introduced monthly savings plan with profit. We are the pioneers of Digital Life Insurance in Bangladesh.

How do you see digital application changing the insurance landscape in the coming years? How will consumers benefit from it, recently you have inaugurated an app for your consumers, could you share some information about that?
When I joined Guardian Life, we looked into the opportunities and strengths that would take the company forward. We focus mostly on corporate business and microinsurance. Our sponsor BRAC has 4.5 million microcredit lenders. When the microcredit borrower dies, recovering the money becomes a challenge for the NGOs. It also becomes very difficult for the family of the deceased to continue with their livelihood. We formed a joint committee with BRAC to get a better understanding of their needs and to develop a plan. With Guardian-BRAC Bima Project, we have covered more than one crore lives, annually we are settling up to 22000 claims. It has been a massive achievement for Guardian Life, we are now the largest insurer in terms of lives covered and in terms of beneficiaries.

As for the younger generations, i.e. those who are 25-35 years old, ideally the digitally active population; we are conveying the insurance knowledge to them via online platforms. To cater to this special segment, we have launched the first Life Insurance App of Bangladesh, namely EasyLife. Primarily, we started off with a term life insurance product and then introduced a monthly savings plan with profit. We are the pioneers of Digital Life Insurance in Bangladesh. EasyLife is a suite of pull products aimed at sharing knowledge and inspiring customers to buy our products.

Globally, insur-tech is going to play a vital role in the next five years. We are preparing ourselves to cope up with what is happening on the other side of the world. If we don’t upgrade ourselves and keep us updated, then someone else will come and capture this market. So we are preparing ourselves, and via this digital platform, we are using our knowledge to take us forward.

We believe and follow our theme, “Insurance for all”. Earning reliability & trustworthiness is pivotal not only for Guardian Life but also for the industry as a whole, we aspire to be the flagbearer of that revolution.

What do you think about the future of health insurance for our country?
We need health insurance. I am stating this from my professional and personal perspective. People do not necessarily anticipate and prepare for sudden medical needs. No budget is set aside to cope with such situations. In reality, according to statistics, 70% of treatment expenses are paid from out-of-pocket expense in Bangladesh. The other 30% comes from insurance facilities provided by multination companies or the government. So, there is a vast market for health insurance. We are a life insurance company, but we also offer health insurance as a supplementary product, selling it to corporates and individuals. Currently, around 300000 lives are covered by our health insurance. We settle about 32000 claims annually amounting to a sum of 24 crore taka.

Currently, we have over 300 hospitals enlisted with us, the people who are covered with us under health insurance, can get a wide array of services from these hospitals and avail exclusive discounts on medical bills.

Customer centricity is also of paramount importance for Guardian Life. We launched the first 24 X 7 call centre in the industry back in 2018 and still, now we are the only one in the whole industry. Our call centre shortcode is 16622. When the doctor advises a medical treatment, the policyholder can go to any of the enlisted hospitals and call our call centre for smooth admission and processing. With Guardian Life Health Card, the policyholders can get treatment up to the coverage limit without paying any cash, Guardian Life provides that guarantee of payment to hospitals on behalf of the policyholder.

What is your vision with Guardian?
The vision of the Guardian is to be number 1. We believe and follow our theme, “Insurance for all”. Earning reliability & trustworthiness is pivotal not only for Guardian Life but also for the industry as a whole, we aspire to be the flagbearer of that revolution. We see a bright future where Guardian Life plays a lead role in bringing about changes to the insurance industry by generating a positive mindset and credibility regarding life insurance amidst the greater population.

Guardian Life Insurance Limited is the harbinger of improving financial inclusion and social safety net in Bangladesh through the various process & product innovations; transforming millions of lives with the magical power of life insurance.

According to the World Bank, half of Bangladeshis aged 15 or more remain without a bank or mobile money account of any kind. A significant number of women are financially excluded compared to men, which points to lower participation in entrepreneurship amongst women in our country. There are mainly two underlying reasons behind the poor state of financial inclusion; affordability and availability. One of the biggest obstacles of providing bank-based services to the most impoverished population is the cost associated with traditional banking methods. Responders of the World Bank’s survey expressed their disappointment over the cost of maintaining an account, for them having a bank account is a luxury which they cannot afford. Similarly, availability is another issue. They also asserted, financial institutions being too far away is another reason for them not having a bank account. Banks avoid operating branches in rural areas with poor population citing viability issues. The amount of resources spent on conducting transactions for the poor with a small balance and small transactions exceed the benefits.

Consequently, the number of life insurance holders in Bangladesh is disappointingly low. According to Swiss Re data, a leading global re-insurer, Bangladesh’s overall insurance penetration rate stood at a meagre 0.57% in 2018, the lowest in the emerging Asian communities. In the year 2017, the penetration rate was 0.55%. The rate is even lower among the impoverished population, which is more concerning. Insurance is a critically important tool for not only reducing poverty but also for helping those who have emerged from it to manage their risk and avoid falling back into the poverty trap. It also plays a significant role in improving financial inclusion.

Over the years, various entities have been trying to improve financial inclusion in Bangladesh. It includes both the government and NGOs who have taken numerous initiatives to bring the economically excluded under the umbrella of formal economic activities. However, a Life Insurance Company is not the primary picture that flashes onto one’s mind when talking about financial inclusion. So, where does actually Guardian Life fit in when it comes to Financial Inclusion?

Guardian Life Insurance Limited is the fastest-growing life insurance company in the country; it is jointly sponsored by Apex, BRAC and Square Group. They operate according to international standards and has been recognized for high-quality service while maintaining global compliance. GLIL aspires to work diligently towards financial inclusion and touch the lives of the underprivileged population with the magical power of life insurance as it provides both financial savings and family protection on the lives of this economic group. In line with the idea, GLIL is innovating numerous products that are playing a significant role in improving financial inclusion of Bangladesh, and they have set the standards of competence and reliability for others to follow.

Microinsurance is designed to help more people buy insurance coverage who were previously unable to afford it. It provides poor and low-income households with the means to protect themselves against the effects of financial risk due to death & total disability of their bread earner. Despite substantial growth in the insurance sector over the past decade, penetration still stands at a very meagre percentage; necessitating a massive need for overhauling. In such a situation, the progressive Insurance Companies have a pivotal role to play in developing this industry along with regulators and other stakeholders. Being the fastest growing life insurance company of Bangladesh, largest group insurer of the country, and a facilitator of “financial inclusion”, GLIL has undertaken a micro-insurance initiative that is ushering a new era in the sector. The effort has been acknowledged by various local and international bodies which included the magazine “Asian Banking and Finance”. They bestowed GLIL with the prestigious “Insurance Asia Award in 2017” for this initiative.

Significant Contributions of Guardian BRAC Bima (GBB) in the Microinsurance Industry
· 1+ crore lives under coverage
· 97% claim payout ratio
· 169 crores BDT paid in claims

Expanding Through Innovation and Joint Effort
Through Guardian-BRAC Bima (GBB), over 10 million beneficiaries of BRAC Microfinance came under the scope of GLIL’s credit shield micro-insurance program (including spouse). BRAC is the largest NGO in the world, with 88.6% of its clients (microfinance) being women. The entire proposition was developed in partnership with BRAC to ensure that it meets the needs of the community. It was enhanced so that the spouse of the borrower could also be covered, as in most cases; the spouse of the borrower inherits financial responsibility of the family and repayment of the debt incurred.

InsuranceAsia Awards 2019

The GBB project has the combining factors to benefit all the stakeholders involved. It insulates BRAC from having to write off loans in the event of the death of the borrower. At the same time, GBB shields the borrower’s family from falling into a debt trap after the sudden loss of a family member. The insurance coverage ensures instant funeral benefit and outstanding loan repayment on behalf of the family of the deceased. The premium pricing is calculated by an accredited professional Actuary, ensuring proper risk assessment and enabling a low cost and a financially viable scheme. Finally, GLIL reaps the benefits of serving a massive client base. However, numbers alone cannot justify the magnitude of GLILs’ achievements. They are protecting millions of low-income families and their livelihoods across Bangladesh in the event of the death of a household member or the earner. Microinsurance is an important safety net against various risks for the poorest and most vulnerable people of Bangladesh. Guardian-BRAC Bima (GBB) is playing a significant role in keeping millions of Bangladeshis above the poverty line and help them to flourish despite the loss of a crucial family member.

In accordance with Guardian Life’s vision of ‘Insurance for All’, Bancassurance is the ideal opportunity to spread awareness regarding the importance of insurance in terms of risk mitigation. Guardian Life Insurance is one of the active proponents of pursuing Bancassurance at policy level while closely engaging with regulators.

The concept of Bancassurance was originated in France in the 1980s, and quickly spread through Europe and now it is practiced all over the world. Bancassurance is essentially a distribution channel for insurance companies, they make use of the vast network of the banks to sell insurance products. Distribution channel is one of the key elements that helps facilitate insurance companies in growing and penetrating the market, functioning as arteries of marketing systems delivering services to customers. When insurance companies collaborate with banks they enter a guardianship of two regulatory bodies governing the process. This maximizes reach and security of the service propositions.

The role of Bancassurance in increasing Financial Literacy and Inclusion
According to the reports by Bangladesh Bank, there are 59 scheduled banks with an extensive network of 10,650 branches all over the country. Collectively, the bank branches have a widespread reach from the major metropolitan cities to deep into the sub-urban regions. In accordance with Guardian Life’s vision of ‘Insurance for All’, Bancassurance is the ideal opportunity to spread awareness regarding the importance of insurance in terms of risk mitigation. Guardian Life Insurance is one of the active proponents of pursuing Bancassurance at policy level while closely engaging with regulators. This platform will allow customer access to more information which may be more difficult through other marketing or distribution channels. Trust is a major factor when it comes to measuring the desired output of a product and banks have that business environment where customers do not hesitate when it comes to depositing their savings or making an investment. After sales customer care is a vital part of any business-client relationship, studies show that Bancassurance customers expressed a higher level of satisfaction from purchasing insurance through bank channels. The ease of making payments through their bank accounts, being able to regularly check their insurance details and access to assistance from bank employees in cases of queries or making claims have strengthened customer’s trust in the insurance industry globally.

Bancassurance is booming in neighboring countries such as India, Pakistan, Thailand, Malaysia and all over the globe. Convenience plays a key part in customer awareness. When customers can have a single avenue for all their financial solutions and the banks inform the customers about the best suitable product for them, it will establish a long financial relationship between the banks the customer. The banks become a ‘one stop shop’ for all the customer’s financial needs. Besides, customer loyalty and retention, Bancassurance is a great business venture for banks. They are able to generate additional revenue in a cost effective manner from their existing resources. Insurance carriers often help train bank staff with incentive plans and specialized training. Banks can cross sell products without increasing much of their operating costs and achieve improved profitability and non-funded income. This venture offers a diversified customer portfolio and increased customer lifetime value which is a very important metric for the banks. The good news is that factoring in all the beneficial effects of Bancassurance, Guardian Life Insurance, the most innovative company in the industry strongly believes that implementation of this kind of venture will not only add further value to their own company but also will pave the path of financial inclusion throughout Bangladesh.

My Guardian Inauguration Ceremony 2018

The mutual relationship between the insurer and customer is very vital to achieve customer awareness for insurance companies. The insurance carriers offer financial protection and security to the customer’s family providing adequate financial solutions. The banks have a magnanimous distribution network which allows for higher market penetration, this is the foremost benefit insurers gain out of this alliance. Which in turn leads to a higher premium turnover. This also allows the banks and insurers to have great customer engagements and an enormous knowledge of the market demand, therefore increases the scope for innovation to offer relevant products. With reduced operational costs, higher efficiency in processing sales and claims, the insurers are able to establish customer trust as well as spread awareness about insurance.

Bancassurance has globally proven to be a great medium to spread awareness about insurance. This awareness benefits customers, banks and insurance carriers alike. The customers receive quality post-sale services, the banks and insurance companies are better able to understand the needs of the customers and generate income, all the while achieving a long-lasting business relationship.

The good news is that factoring in all the beneficial effects of Bancassurance, Guardian Life Insurance, the most innovative company in the industry strongly believes that implementation of this kind of venture will not only add further value to their own company but also will pave the path of financial inclusion throughout Bangladesh.

EasyLife-BASIS ICT Award 2019

Over the next decade, digitalization will play a pivotal role in reducing poverty and improving financial inclusion. Digitization connects people, processes, and things intelligently which allow business entities to access more data. Greater data allows for more intelligent decisions, and so more comprehensive benefits can be derived from the digital revolution. More importantly, it makes financial services more accessible and transparent. Digitalization is the key to accelerating the impact of financial inclusion.
The idea of Digital Bangladesh has transformed the socio-economic scenario of our country. Currently, we have the second-largest pool of online workers in the world and income from ICT exports are gradually on the rise. It has also transmuted the lives of the impoverished population by allowing them to take part in economic activities. The digital platform has been playing a significant role in improving financial inclusion in Bangladesh. Multiple businesses entities across the country are continually innovating to bring more people under the umbrella of financial inclusion. Guardian Life Insurance Limited (GLIL) is considered to be the most innovative, progressive and fastest-growing Life Insurance Company of Bangladesh and has been leading the change in providing access to the masses to take part in formal financial activities ushering a financially inclusive revolution. Through EasyLife and MyGuardian, GLIL is set to transform millions of lives with the blessing of life insurance.

MyGuardian is a digital service platform which is designed to enhance the customer experience of current and future clients of GLIL. It includes both MyGuardian self-care app and MyGuardian Web Portal, each of them is specifically designed to provide an extensive client experience. MyGuardian App is a one-stop destination that allows clients to make more informed decisions about their preferred policy. It has detailed product information on the retail product portfolio of GLIL. It enables them (customers) to choose their preferred product by evaluating their options through the premium calculator. Remarkably, MyGuardian allows clients the option to pay premiums instantly via debit/credit cards and mobile banking. Currently, the app is being used by 5000+ users.
Moreover, it is possible to make instant claims for swift processing; a procedure that otherwise can take weeks through traditional methods. The same benefits can also be availed from MyGuardian Web Portal. The MyGuardian Digital Platform has the potential to be a game-changer in financial inclusion by making life insurance services more accessible to millions of Bangladeshis. GLIL is pioneering financial inclusion by digitalizing life insurance for millions.

EasyLife Inauguration Ceremony 2018

EasyLife is primarily a Digital Sales Channel activated via app and web. It is intended to make insurance more accessible to consumers. A significant number of people in our country are now connected through the internet; Easy Life allows them to purchase insurance policies through both app & web.
One can conduct all the activities entirely online for buying an insurance policy and also pay the premium for being under coverage instantly. The very distinctive propositions of EasyLife are accessibility and availability. Its services are available on-demand regardless of the time. Without any intermediaries, one can buy life insurance instantly without the hustle of medical test and filling-up a form. Additionally, information gets dilated through the traditional method of securing clients through agents. It paves the way for illegal and unethical practices. The conventional approach resulted in the spread of misinformation and confusion, which still haunts the sector. Through EasyLife, the entire process has become transparent. Clients now have all the detailed information about every scheme available; it allows them to assess and determine the plan most suitable for them. EasyLife aims to educate the market about the aggregate benefits of insurance and ultimately encouraging them to buy insurance.
To provide a genuinely world-class digital life insurance experience along with monthly savings, GLIL carried out extensive desk research and benchmarking study with products of other countries with the homogeneous populace which resulted in the following products:
1) EasyLife – Simple Term (No premium refund option)
2) EasyLife Plus – Premium Refund Option
3) MSP – Monthly Savings Plan
4) MSP Ladies – Monthly Savings Plan with CI (Critical Illness)
With more than 2.5 Lac downloads since inception, EasyLife currently has more than 1 Lac monthly users. Moreover, EasyLife offers a digital loyalty program for its users that includes tremendous digital offers & discounts at lifestyle brands and prominent hospitals. Currently, over 20,000 digital loyalty program users of EasyLife are enjoying exciting discounts at more than 30 hospitals across the country.
GLIL has done an incredible job in creating a user-friendly and intuitive app which is compatible with the average financial literacy of Bangladesh.


Identifying The Fault Lines

Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD) shares her opinion about the state of our banking sector, perils of the high unemployment rate and the challenges that lie ahead for our economy.

As we step into the new decade, what is the biggest challenge that lies ahead for our economy?
Our domestic resource generation has become a major challenge, especially in view of high development expenditures. Despite the high growth of gross domestic product (GDP), the tax-GDP ratio in Bangladesh is the lowest in South Asia. This trend of the shortfall from the targets has started since FYI 2012. The short-fall of revenue –GDP ratio is now on an increasing trend. Our tax-GDP ratio is even lower than the average ratio in the Least Developed Countries (LDCs) where it was about 15 percent in 2017. We are about to complete the tenure of the Seventh Five Year Plan (7FYP). In the 7FYP the Revenue-GPD target is set at 16.1 percent revenue-GDP ratio and tax-GDP at 14.1 percent by FY 2019-2020. It is now unlikely that these targets of 7FYP will be fulfilled.

Efforts towards the generation of revenue through higher direct taxes should be the priority. We are gradually becoming dependent on indirect taxes which are inequitable and discriminating towards the lower-income groups. We have not seen an effective implementation of the new Value Added Tax (VAT) law. Initiatives are needed for the expansion of tax net and reduction of tax avoidance. The National Board of Revenue (NBR) should not only target the fixed income salaried people who are already in the tax net, but also the large tax evaders whose incomes are not always accounted for. The NBR has to be fully automated and human resource development should be an ongoing process.

Bangladesh’s ranking in the soundness of banks is the lowest among the South Asian countries, what are the factors that lead the sector to this state? How will the fallout affect the government?
The banking is in shambles at the moment. The amount of non-performing loans (NPLs) has been increasing continuously. On top of it, the practice of writing off and rescheduling of bad loans is also increasing. Several policies have been undertaken in 2019 which are not going to help improve the health of the banking sector, rather benefit the loan defaulters. Those are taking the banking sector backwards. All good practices are being scrapped one after another in the banking sector. The independence of the central bank has been undermined by external influence. All banking policies are being devised under the directives of the powerful and groups.

In June 2019, the total share of NPL was as high as 11.69 percent of total outstanding loans. On the other hand, the banking sector is facing a liquidity crisis. Domestic credit to the private sector has also been below the target of Bangladesh Bank. On the other hand, government borrowing from the banking system has been on the rise due to low revenue generation and underwriting the high expenditures of several mega projects. The cost of these megaprojects has escalated over time due to weak accountability and transparency. Therefore, on the one hand, low revenue generation and on the other hand, high bank borrowing by the government are going to have serious ramifications on the government’s fiscal management.

Currently, Bangladesh’s youth unemployment rate is 10.6 percent, more than two and a half times the national average. How can this issue be best addressed?
High economic growth has not been able to create enough jobs in the economy. Particularly, the youth have not been able to find suitable jobs despite university and college degrees. One of the features of our growth has been that, surprisingly, growth has been achieved despite low private investment. Indeed private investment has been stagnant at around 23 percent of GDP for the last couple of years. Hence without any private investment, the economy could not create adequate jobs.

More worrying, the higher the education level, the higher the unemployment level. The other feature is that though there are some demand for workforce in the economy, employers do not find our educated youth suitable for those jobs. This implies that there is a mismatch between the demand of the employers and the supply of graduates. This emphasizes the need for modernising our education system in line with the need of the market. On the other hand, our economy is not large enough to accommodate each and every job seeker. Therefore, opportunities for self- employment have to be created. Youths who want to be entrepreneurs should be provided with training and access to finance. Sadly, while thousands of crores are being siphoned off from the banks by loan defaulters, banks show little interest to provide loans to new small entrepreneurs.

In conversation with Asif Tarafdar, Dr. Mirza Azizul Islam, Professor, BRAC Business School shares his opinion about re-thinking our exchange rate policy, the falling stock market and effective ways of containing inflation.

In recent years, while Bangladesh’s major competitors in the global market, such as China, Vietnam, India, and Sri Lanka, have experienced significant depreciation of their currencies against the US dollar, Bangladeshi taka remained quite stable. How important is it to re-think our exchange rate policy to stay competitive in global trade?
The case in point is Bangladesh taka remained stable while the exchange rates of a number of neighboring countries particularly competitors of Bangladesh in respect of export specifically garment exports have depreciated. Well firstly, Bangladesh taka has also depreciated as current rate is about taka 84.9. And two years back, it was somewhere around 80 per dollar. But of course, the magnitude of the depreciation is probably somewhat lower compared to other countries. So, the question is, whether a devaluation will increase our exports?

Now, the basic argument underlying exchange rate devaluation is that it will lead to more revenue for Bangladeshi producers. Therefore, they will increase their supply in the international market and they will move along the supply curve. But there are a number of issues that might arise from such a move. First of all, unlike countries such as China or India, our exports are heavily dependent on imported inputs. So if there is a devaluation, the cost of production will also increase because the imported inputs.

Another problem that may arise is that, an exchange rate depreciation might increase domestic inflation. Now when the domestic inflation increases there will be pressure from the workforce to raise their salary level leading to an increase in the cost of production.

Thirdly, if the exchange rate is deprecated, foreign buyers may try to negotiate for a lower price in dollar terms. The purpose of devaluation is to ensure producers get more money for the same dollar value. However, often the exporter complains that the foreign buyers are constantly pressing for reduction of prices and in fact, the unit prices have gone down in recent time. So if they succeed in negotiating a lower dollar price, that means the part of the benefit of devaluation will be transferred to the foreign buyers.

So there are concerns but that does not mean that we should not give some thought to further the generative evaluation, but I think it should be the implications that I have just mentioned should be carefully analyzed and then on that basis they should take a decision. So, just because there is some demand from some quarters, the central bank should not execute such a measure without making a thorough examination of the potential consequences of devaluation.

I have found that money supply and inflation are not very much directly related in Bangladesh.The primary factor which is responsible for inflation in Bangladesh is the exchange rate. If the exchange rate de-values, inflation increases.

Due to the falling stock market index, small investors are losing their investments and facing an uncertain future? (General investors lost Tk 15,000 crore, due to falling index) What are the remedial policy initiatives that can be taken to rekindle faith in the stock market and bring back investors?
It is indeed very unfortunate that the stock market index has been falling for quite some time and in fact, now it has sunk even lower, the DSC index lost 76 points and it is now 4,419 which is less than half of the highest index that was in December 2012 (9812). There are a number of reasons for this eventuality. First, from time to time, it has been observed that there was a lack of coordination and understanding among the various regulatory authorities.

For example at some point, Bangladesh Bank had put a limit on the investment by the banks in the stock market. Then they also imposed the requirement that subsidiaries of the banks, which may be a mutual fund or non-bank financial institutions, their investment would also be counted as a part of investment by the bank. Thirdly, it was also postulated that investment by the commercial banks in the unlisted company’s shares would also be treated as a part of the overall investment. Now, these things had a negative effect on this stock market and later on, Bangladesh Bank retracted the decisions, so the problems have been solved to some extent. However, incidents like this create a lack of confidence in the overall market scenario.

Concurrently, there have been other regulatory issues. For example at one point, Titas gas decided to reduce the wheeling charges of gas that had an effect on the stock market because of substantial shares in the stock market. Then the problem with Grameenphone which still remains alive because there has been no resolution of the conflicting claims by the stakeholders and regulatory boards. GP is the single largest company in this stock market, so the news had a negative effect on the stock market. Additionally, the banking sector has been riddled with ever-rising problems of non-performing loans. According to the latest count on September 2019, the amount of NPL was Tk 114 lakh crores which both in absolute terms and in total proportions is the highest in recent history. So this huge volume of NPL is causing loss of confidence in the banking system. And the growth of deposits into the banking system has been falling. As a result, banking sector shares have gone down and it is still this sector as a whole account for a substantial portion of the total stock market capitalization.

In addition, the banking sector problems create another situation where some of the investors borrow money from the banks and invest in the stock market. But because of slowing down of deposits, the banks are not in a position to extend credit to the private sector and the growth of credit to the private sector has come down now to about 10% which is way below the monetary policy target of 16% plus. These factors coupled with the GP crisis started a panic selling in the market. So these are the main reasons behind the distress of the stock market.

The banks are not in a position to extend credit to the private sector and the growth of credit to the private sector has come down now to about 10% which is way below the monetary policy target of 16% plus.

The standard transmission channel of monetary policy is that an increase in the money supply would cause a reduction in interest rate; this would lead to a rise in investment and thereby higher aggregate demand and higher GDP. The experience in Bangladesh shows that this link does not work effectively, what is the reason behind that?
Well for a country like Bangladesh monetary policy is not very effective. Because a large part of the money supply comes from net foreign assets, which is dependent on exports and remittance where Bangladesh Bank has very little control over. Borrowing by the government is also part of the money supply, where the central bank has no control over. And the same thing applies also to various other government bodies that are autonomous and statutory corporations. So a large part of the money supply is outside the control of the central bank.

There isn’t really a strong link between money supply and interest rate. And that’s partly because our banks especially the private banks do not operate on the basis of competitive principles they set the interest rates both for lending and deposit collusively and as a result, even there have been many years and money supply has increased but the interest rate has actually gone up. Consequently, monetary policy, in general, is not effective in Bangladesh and is not an effective tool to control inflation. So given all those points that I mentioned. I don’t think monetary policy in Bangladesh can be very effective in accelerating GDP growth.

The purpose of devaluation is to ensure producers get more money for the same dollar value. However, often the exporter complains that the foreign buyers are constantly pressing for reduction of prices and in fact the unit prices have gone down in decent time.So if they succeed in negotiating a lower dollar price, that means the part of the benefit of devaluation will be transferred to the foreign buyers.

What can be done to ensure the effectiveness of monetary policy in containing inflation?
I have found that money supply and inflation are not very much directly related to Bangladesh. The primary factor which is responsible for inflation in Bangladesh is the exchange rate. If the exchange rate de-values, inflation increases.

The second issue is that, as we are importing raw materials and capital goods. Prices in the international market affect our inflation and we cannot free ourselves from that problem because it would be unthinkable to be able to substitute those imported inputs with domestic production in the near future.

So, I don’t see any particular way in which monetary policy can be made more effective in containing inflation. However, we may try to increase domestic supply of goods and services through use of monetary policy. The Bangladesh Bank and also the commercial banks themselves ensure that the credit that is flowing to the private sector is actually used. For productive investment then the domestic supply of various goods and services will increase and that will have a positive effect.

Unfortunately in many cases, the credit that flows is not used for productive purposes, some of it goes into the trade. I have seen that the agricultural loan is given to someone who uses to buy a motorcycle or to construct a house. So, these are not reproductive investments. In some cases, there are complaints and that the money is actually eventually sort of smuggled out of the country. So the objective should be to make use of monetary policy to increase the supply of output. So that if the supply increases then price level is likely to come down.

Bangla Bond has the potential to be a groundbreaking event in our history in terms of alluring foreign funds for investment in building essential infrastructures and play a crucial role to help us achieve our Sustainable Development Goal Targets. 

Some remarkable achievements have marked the past few years for Bangladesh; the country has become one of Asia’s most incredible and unexpected success stories. Aided by robust growth in the manufacturing sector and incremental rise in in-bound remittances, Bangladesh has become the second-fastest-growing nation in South Asia. According to the World Bank, Bangladesh’s GDP is projected to grow at 7.2 per cent this fiscal year and 7.3 per cent, the year following. Most importantly, Bangladesh has met United Nations criteria to graduate from “least developed country” status by 2024. Despite the accomplishments, there are several aspects of the economy which are concerning. There are a few worrying indicators which have prompted the stakeholders of our economy worried about the sustainability of the rapid growth. One of the biggest concerns for the future of our economy is the poor state of private sector investment. Despite the gradual rise in the investment-GDP ratio over the past three decades, in recent years, the share of private investment in GDP has remained static. The Private investment-GDP ratio has remained stuck at 23 per cent for the past few years, which has raised uncertainty about robust future growth. Private investment is essential to generate growth and employment for the growing workforce. In order to achieve an 8 per cent growth by 2020, the Private Investment-GDP ratio requires to be at least 30 per cent. The Government of Bangladesh has recently issued Bangla Bond to solve the stagnant private investment scenario.

Taka bonds are a more sustainable form of foreign borrowing compared to dollar denominated debts for Bangladeshi entities that only have earnings in local currency. Such issuances allow the Bangladeshi entities to avoid the exposure to currency risk while providing access to international investors who seek exposure to the Bangladeshi Taka and the corresponding higher yield. It also raises the profile of Taka in international markets, improve the country’s image and help attract FDIs. Effective use of the instrument can, therefore, boost up investments in the private sectors of the country. Going forward, it would be worth exploring whether such bonds can be issued for tenors longer than the three years tenor of the “Bangla Bond” issued by IFC recently – that will be even more effective since the private sectors in Bangladesh severely lack access to long term funds currently.”

Arif Khan
CEO and Managing Director
IDLC Finance Limited

A Game Changer
Bangla Bond debuted as a taka- denominated debt instrument, on the London Stock Exchange on November 11. Issued by the World Bank Group’s private sector lending arm International Finance Corporation (IFC), the bonds are worth $9.5 million, and the proceeds will be used for investment in private infrastructure projects, as well as public-private partnership initiatives. All bond payments (including the initial subscription amount and any subsequent coupon and principal payments) will be settled in dollars, in an amount determined based on the applicable dollar-taka exchange rate, with the investors taking on the exchange rate risk. On coupon payment dates and upon maturity after three years, IFC will take the taka earnings from its investments in Bangladesh and convert the amounts back into dollars to pay the offshore investors in the taka bonds.

Leverage of Local Currency
International investors are often interested in local currency-based bonds because they do not carry the risks of interest rate fluctuations. Concurrently, foreign investors often face significant hurdles while trying to invest in Bangladesh; they range from logistical to infrastructural impediments. Bangla Bond will make the process easier and hassle-free. The local currency bond issuance can bypass the risks of borrowing in foreign currency, which can be subject to fluctuating exchange rates; so it makes sense that local investors would prefer to borrow in local currency.

An Instant Hit!
An initiative of the International Finance Corporation, Bangla Bond has brought onboard a new set of foreign investors, it also an acid test for the sustainability of Bangladesh’s growth. The interest from investors has been remarkable, leading to a 30 per cent oversubscription of the first tranche. The proceeds of the first tranche were converted to taka and lent out to Pran-RFL Group, which was about Tk 80 crore, at 11-11.5 per cent interest. IFC plans to issue multiple tranches amounting to $300 million over the next couple of years, with the next round taking place early next year.

Looking Ahead
The listing of Bangla Bond is a silver lining among the dark clouds of uncertainty in Bangladeshi private sector. Although the size of the initial offering is meagre compared to the demands of our economy, it has the potential to be a groundbreaking event in our history in terms of alluring foreign funds for investment in building essential infrastructures and play a crucial role to help us achieve our Sustainable Development Goal Targets. 


Prize of Perseverance

Asif Tarafadar sits down with the managing director of Top Ten Group, Md. Syed Hossain who shares his odyssey from absolute obscurity to heights of success. 

At a time when custom tailoring is receding, Top Ten is expanding against the wave. What aspects of your company do you believe have made that possible?
I started my journey with fabrics and tailoring; my business policy was to make limited profits. At the time, customers in the market were getting ripped off as they had to haggle with the retailer. To ensure fairness and make shopping more enjoyable, I commenced a fixed pricing policy at Top Ten which became an instant hit. My initial strategy was to make sizeable sales by offering competitive prices.
Concurrently, my counterparts at the sector frequently missed their deadlines which I believe is a poor business practice. On the other hand, my team at Top Ten has always ensured that we are ahead of the delivery date. There have been cases where we delivered a suit within six hours and a shirt in two hours for clients who needed them urgently. I believe, because of the service I have been able to provide to my clients, Almighty has blessed me with much success.

What encouraged you to become an entrepreneur?
Since childhood, I have always dreamt of becoming an entrepreneur and lead people in achieving something remarkable. Almighty Allah allows everyone the opportunity to become successful; you have to utilize that with honesty and hard work. I enjoyed hard work and being productive. There are no shortcuts in life, if you want to be successful in life, there is no alternative to hard work. Most importantly, I never misbehaved with anyone; I have always maintained wonderful relationships with my clients. Simultaneously, I have always tried to carter to the current demands of the consumers. It is imperative in our sector to keep up with the latest fashion trends. My current goal is to expand Top Ten in every Thana across Bangladesh and also enter the international market.

There have been many discussions on the general skill level of our workforce, especially at the low-wage segment. Through your experience, do you believe there is a significant skill gap?
I don’t believe there is a vast skill gap. Most of our employees are from rural areas of Bangladesh, and they start at the entry-level. After going through some basic training, their performance has been outstanding. Every senior-level employee at my company started their career at entry-level and gradually been promoted. The reason stated perception exists because there is a lack of opportunity for them to participate in formal employment. The most pertinent proof of that is our (Top Ten) workforce. Within a year of commencing employment, they become incredibly productive and efficient at work.

Can you please share about the challenges you face as the managing director of Top Ten?
In any business, there are many challenges. You can never be a successful businessman without taking risks; there will be obstacles and challenges, and you have to face them with patience. Over the years, I have taken significant financial risks, my team and I have overcome those challenges through consistent hard work.

Do you have plans for scaling up to export?
Yes! Bangladesh has endless possibilities in RMG exports because of the availability of competitive labour. Our economy is heavily reliant on outbound migrant workers and RMG. The strong labour force has facilitated immense possibilities for our country to become a manufacturing hub.

You are also involved in numerous social welfare programs, can you please share some information about them with us?
By the grace of Almighty Allah, I have initiated several programs to support the vulnerable segment of our country. I have never taken any financial assistance to run these programs, nor I have any intentions. They are run on a portion of Top Ten’s revenue. Besides school, madrasah and orphanage, I have plans to establish an old home very soon.

Stepping Ahead

In a conversation with Asif Tarafdar, the CEO of Apex Footwear Limited, Rajan Pillai explicates on the importance of innovation in business, the importance of a strong female workforce and what it takes to excel in the retail industry. 

From your experience, what are the aspects of the retail industry that you find appealing?
I’ve been in this industry for quite a while now. It has been almost 25 years after starting as a salesman. Over the years, I have worked at every stage of the ladder to reach here. Retail is a uniquely dynamic industry. It might not be apparent to many, but the sector is very glamorous, extremely dependant on the aesthetics. The customer makes their purchase decisions depending on the face value. The phenomenon is analogous to the film industry where a lot depends on the impression you make.

It is also continuously evolving. A couple of decades back, people used to get acquainted with brands through a visit and media. Now social media and word of mouth have become the primary for communication with consumers, nothing stays hidden from the eyes of the consumers.

So, when I look at retail perceptually, it is how you ensure that the customers are given the comfort of buying at the best possible environment. Retail is not just about selling a product, it’s also about selling an experience. Therefore, if you’re not able to sell an experience, nobody’s going to buy your product. Customers will always have alternative choices, you have to differentiate yourself by providing a unique retail experience. When a consumer walks into a store, you must ensure that the atmosphere is welcoming, the displayed products are clean and the staff are accommodating of customers every inquiry.

What qualities do you believe are necessary to be successful in this sector?
I believe some basic qualities are necessary to be successful in life irrespective of the sector. It begins with choosing the industry that interests you. If you don’t have passion for something, most likely you will fail to make an impression there. Consequently, for example, when we came out of college, retail was the future. So, pursuing this field has brought me a lot of success, it might not be the same for someone else. Therefore, success depends on the goal you have set for yourself. Some people come to retail for temporary financial benefits but if you want a career here, you have to be very focused. So, if you choose a path, you have to give 110% effort to become successful. Like I always say, there is no short-cut in life!

How was your experience of working for Being Human?
I worked with being human for two years. I started the brand in India. Initially, Salman Khan had a brand name called “Being Human”, it did not have a story or concept. It is a charity where all the proceeds go for humanitarian work. Concurrently, we were approached by an Indian diversified textile and apparel manufacturing company, Mandhana Industries who offered to avail the license to produce apparel for the brand.

Being purely an operations guy, I was part of the team and we set up the business for them. For two years, I worked very closely with Salman (Khan) and we opened about 30-32 stores. It is a very successful brand and can be more successful if done properly. Just like I said, you can’t have a half-pie, to be successful you have to do something wholeheartedly.

Can you please share the challenges you face as the CEO?
I don’t believe there is any person on the planet who is without challenges. Without it, life is depressing. Here, we deal with hundreds of challenges every hour. Retail is a sector which is continually evolving and there is no room to get complacent. The moment you start believing that you are the best, you commence your own demise. For example, successful European brands like JCPenney and Marks & Spencer are at the edge of extinction because they failed to evolve. Conversely, nobody knew China a few decades ago but they have managed to establish themselves as the powerhouse because they have been able to evolve according to the demand.

For example, if a consumer wants a specific feature on a mobile phone, as a phone company, you will not be able to survive without providing that feature. One of the reasons companies like GM and Ford have been bankrupt because they thought themselves as the best until they suffered heavy defeat at the hands of Japanese carmakers.

You should always consider yourself a student which will help you to grow. You have to set your sights for the next stage and grow accordingly. The moment you begin to think that you are at the top, it’s easy to fall. So, I always tell my team that we are at the bottom of the pyramid and there is a lot to be achieved.

Did you have to make any changes to your leadership strategy for Bangladesh?
Yes! a lot actually (laugh). I have previously worked in places like the Middle East and India where retail is very dynamic. Dubai is primarily thriving in the service industry, therefore, their service is strong. On the other hand, Bangladesh is primarily a manufacturing and agricultural country. The service industry is at a very primary stage right now. I am sure it will develop just as its international counterparts but it will take some time. When I joined here in Bangladesh, I had numerous ideas but could not implement them because the owners of the company had other priorities. I realised that I have to take things slowly and revise the basics. Our first Programme was “Back to Basics”. So, I started with the basics and by the grace of Almighty, we have seen robust growth for the last six years.

Bangladesh is set to emerge as the next manufacturing hub for the global footwear industry. Besides low-cost labour, what are the aspects of the industry we should focus, to ensure robust growth?
Bangladesh’s economy is sprinting. The primary reason behind the keen interest from investors is the availability of competitive labour force and women workers. At our factories, almost 70% of workers are female. More female workers contribute higher productivity of a country. China has managed to retain as one of the strongest economic powers in the world because of the availability of a largely female workforce.

Secondly, besides ensuring competitive labour, we can increase our productivity. China’s labour force is much more productive and capable of delivering output a time higher ultimately compensating for the higher wages. Therefore, we (Bangladesh) are lacking in productivity but the workers are not to be blamed for that. We have to change the system which promotes low productivity. As more and more foreign companies come to Bangladesh, they are bringing new techniques to increase productivity. This will have a positive effect on the overall productivity of Bangladesh, concurrently it will become more competitive. I am confident that in the next five years, the footwear industry of Bangladesh will become very strong. Honourable Prime Minister has set a target of 5$ billion export but I believe it will surpass that.

There are some hurdles that are required to be passed before that, logistics is one of them. It takes a lot of time to process our exports through the port. Often, shipments are delayed by weeks due to logistical complications, but clients are going to penalise us nonetheless. I really hope the government can solve this issue.

Apex Footwear has now decided to invest Tk100 crore more for building a new factory to carter to the local market. What has prompted you to focus on the local market?
Our local business is very strong, and it will keep expanding, that’s why we have invested in new facilities. We have just put a 6-floor building. Our Chairman Syed Manzur Elahi and Managing Director Syed Nasim Manzur are very focused on their goals in Bangladesh. My chairman is adamant about ensuring the 12,000 workers in both our factories are being looked after properly. He makes sure that they are fed properly and paid on time. Not only the workers but their families are dependant on us, Apex is well aware of that responsibility.

What is your vision as CEO of Apex Footwear?
We haven’t even started yet! (laugh). There is a long way to go, as I stated, it is not the people rather the process that will make the organization successful. So, people will come and go, but if there is a proper process in place, the business will continue to grow successfully.

We currently have about 250 stores, 222 franchises and 189 distributors. It is a remarkable achievement which has been made possible by the hard work done by our chairman. With his vision, I am sure we will do much better in the future.

Pine Solutions Limited is one of the leading software development companies in our country and it is winning over the Bangladeshi ICT sector with remarkable innovations. 

Information technology and business are becoming inseparably interwoven. It derives the path to innovation which is the path to success in business. Subsequently, Bangladeshi companies are increasingly leaning towards ICT companies to bring innovation and efficiency in their operations. Among the existing Bangladeshi ICT companies, Pine Solutions Limited has been making headlines across the world with their service and innovation.

In just five years of existence, Pine Solutions Limited has become one of the leading software development companies of our country. The quality and reliability of their developments have been winning over corporate Bangladesh and helped them to snap up some of the biggest clients from diverse sectors. The company’s incredible success is owed to the tenacity of providing excellence through the adaptation of the latest technology and insights on respective industries. Pine Solutions Limited has set the bar high for their counterparts by winning several national and international recognition through its flagship products WeeReach and Poshapets. Pine Solutions was awarded the Champion at the BASIS (Bangladesh Association of Software and Information Services) National Award in research and development.

Early Years
Pine Solutions Limited was initially founded in 2014 by Sanjida Farhana while she was still studying in Europe. Sanjida Farhana was completing her masters from IE Business School in Spain. The company was officially launched in 2016; it has been making waves in the Bangladeshi ICT sector ever since. Besides leading Pine Solutions, Sanjida Farhana is also an educator. She was a faculty at Bangladesh University of Professionals (BUP) before joining North South University as a part-time faculty. She is also the winner of the CMO Asia Leadership Award this year.

Pine Solutions has also been celebrated as one of the winners at the 2019 Messaging and SMS Global Awards. The company took home the Award for Best SMS/A2P Provider – APAC, the only Bangladeshi company to be acknowledged with this recognition.

Developed by Pine Solutions, WeeReach allows business entities to engage with their customers through SMS, Voice, Push, Bot, Email, and Social Media Apps. It can be extremely challenging for companies to engage with their customers as they continuously move across various platforms. Conversely, there is an immense amount of data in the digital space, which are inutile if not analysed. It leads to poor customer service as businesses fail to respond to customer demand in real-time. WeeReach is an omnichannel platform that allows companies to engage with customers across various platforms. With the help of advanced analytics, it also creates rich profiles of each customer to deliver the ultimate personalised experience in a single conversation that threads together multiple communication channels. The platform has helped numerous Bangladeshi companies to maximise utilisation of customer engagement through Voice, SMS, and Viber services. Impressively, WeeReach provides messaging solutions to several Bangladeshi banks. The banking sector of our country relies heavily on this service, as it is the most preferred medium of communication by clients. A large proportion of our population do not use smartphones and have limited access to the internet; they solely rely on automated messages to receive their banking information. Therefore, it is playing a crucial role in ensuring access to information. Pine Solutions has also been celebrated as one of the winners at the 2019 Messaging and SMS Global Awards. The company took home the Award for Best SMS/A2P Provider – APAC, the only Bangladeshi company to be acknowledged with this recognition. 

The Pine Solutions Team

Co-founded by Sajida Farhana (CEO), Tasneem Islam Arna (COO) and Nafizul Islam (CTO), PoshaPets is a complete pet based solution delivered at your doorstep. Once considered a taboo, owning pets in Bangladesh has become very popular. However, pet owners across the country have to suffer the brittle support system. Concurrently, most of them find it very difficult to find verified home-call vets and pet food home delivery. Some owners also look for grooming services for their pets; all of the services were very limited or non-existent in the country until now. PoshaPets is a one-stop solution platform that brings hassle-free premium services for your pets. Owners can sign-up and create a profile for them and their pets and enlist the required services. The services range from making an appointment with an enlisted vet to ordering food or grooming services. The blockchain and IoT based mobile application can be used to find a nearby veterinary, pet food shop and service. It also saves aggregate medical history data of the pet for future reference. PoshaPet is also facilitating real-time pet tracking, allowing the owner access to the history of complete physical activity of the pet. It has been hailed as one of the most promising startups in the world by various national and international bodies. It got selected in GP Accelerator, the largest acceleration program in Bangladesh powered by Seedstars and has been shortlisted for the final conference at Startup Jalsa to be held at Dharamshala, India.

Besides leading Pine Solutions, Sanjida Farhana is also an educator. She was a faculty at Bangladesh University of Professionals (BUP) before joining North South University as a part-time faculty. She is also the winner of the CMO Asia Leadership Award this year.

Looking Forward
In a few years, Pine Solutions Limited has become one of the fastest-growing software development companies in Bangladesh. They have set a benchmark for quality and reliability for customer engagement solutions in Bangladesh. Their flagship products WeeReach and PoshaPets have received multiple international acclamations and investors are already lining up to fund the company. The Government of Bangladesh is envisioning a prosperous Bangladesh through the digital revolution. Pine Solutions Limited is a lustrous example of that vision properly executed through innovation and diligence.

In a conversation with Asif Tarafdar, the CEO of Grameenphone Ltd, Michael Foley divulges on what it takes to stay ahead in the ever-evolving telecom industry, the delights of working in Bangladesh and the things that keep him awake at night. 

The Telecom industry is a dynamic and rapidly evolving sector, what challenges does this pose? What are the strategies that help you to ensure the ship is guided in the right direction?
That’s a wonderful question and a great topic to start the conversation because our industry and the world is becoming much more complicated. In the past, in telecom, the only real evolution was in technology, and you could predict the path of progression. Now, the transformation has become multidimensional; every other aspect of the sector is evolving, including the regulatory environment and international competition. Concurrently, new players are entering the market like OTTs (Over The TOP), cross-platform messaging and VoIP platforms like WhatsApp and Viber. Most importantly, consumer behaviour and preferences are constantly evolving.
Consequently, the future is no longer predictable; therefore, we have to allow ourselves to perceive/predict and react, which is not easy for big companies. To make that happen, we have had to change the culture of not just Grameenphone fundamentally, but the entire Telenor Group over the last four years to become much more supple. It allowed us to adapt quickly and look for opportunities where otherwise we would not have searched before. The process stipulates making the organization leaner. It also involves removing layers of management, automating and replacing outdated systems. Instead of using massive system developments and releases once every half year, or every year, we now have a customer-facing tool, MyGP, which we do releases every two weeks. Therefore, we moved to a completely different operation from where we were before.
So, the answer to dealing with an uncertain future is to give yourself the tools to be much more flexible. And we call that “Agile”; we have to react quickly. But we also have to predict and move fast while being in touch with the market by using tools like Big Data and AI.

How has GrameenPhone incorporated the use of Big data and AI in its operations?
We use Big Data, Machine learning, and some AI to design promotions. They help us to understand the consumers by Upazilas, or even smaller groups and design promotions accordingly. Grameenphone can modify the offers that consumers get, based on their usage almost in real-time.
We are also using more and more of these tools for management of networks because they are becoming very complex. Modern networking technologies require incredibly sophisticated tools; we augment human intelligence and effort with these advanced technologies.

Your consumer base is incredibly large and diverse, does that make predicting even more challenging?
We have roughly 76 million customers right now, and that scale allows us to do very significant analysis. For example, GP serves up 400 million minutes of voice services per day. In every one of those calls, there are multiple interactions. These interactions allow us to create models of how our customers and the economy behaves, which eventually enables us to start crafting services and products that meet the needs of clients. And that the ability of computing power today to crunch this amount of is such that the scale of it gives us an advantage rather than a deficit. 

I usually tend to be very deeply hands-on, involved in every aspect of the business. From working on promotions to setting up towers in various districts, I prefer to be engaged in every operation.

You have previously worked as CEO of Telenor Pakistan and Bulgaria, are there any specific challenges that you had to overcome in Bangladesh?
I’ve previously worked in markets similar to Bangladesh, including Nigeria, Kenya and Tanzania. Like any other market, Bangladesh has some specific challenges. For us (Telenor Group), Bangladesh has been one of the most successful ventures, and we’ve been here for more than two decades. It is the cornerstone of our activities in Asia.
For Bangladesh, some obstacles are very distinctive, for example, I’ve been here for 36 months, and we have already had three cyclones. These are obstacles that you don’t have in other parts of the world. But we have become good at dealing with these things. So eventually, we get good at dealing with the challenges that exist in specific markets.

Do you have to make any adjustments to your style of leadership depending on the country you are working?
Yes! I usually tend to be very deeply hands-on, involved in every aspect of the business. From working on promotions to setting up towers in various districts, I prefer to be engaged in every operation. However, this business has become so massive and complex that it doesn’t allow me to do that anymore. Likewise, our corporate strategy of “Red way of work” and “Agile” makes the leader play a different role. So the leader plays two particular roles now; it includes setting clear objectives and managing the results closely.
And in the middle, you let people within broad guidelines find their way. My job as a leader is to set those very clear objectives and to manage the results at the end, and then facilitate the way they do things, but let people find their way.
George Patton, the American general in the Second World War, said to let people do their job the way they want to, they might surprise you with the results. And this is what happens in GP, we have a fantastic team of people, the best in Bangladesh work for us, and they do amazing things.
My leadership team and I do not need to tell them how to do something. We only explicate our expectations in the end.
There are some exercises where I’m on the team but not leading. My office doesn’t have a big wall around it and has a desk like everybody else, and anyone can walk up to me. I am also part of some business teams only to provide guidance rather than being the final decision-maker.

Are you satisfied with the rate of 4G adaptation among Bangladeshi consumers?
Yes! The adaptation rate is admirable. There are challenges, and most of them have to do with handset availability. Smartphones are expensive in Bangladesh, but there’s a reasonable good reason for that.
Right now, we cover 71% of the population with 4G. And by the end of next year, we will have all our sites under 4G coverage which amounts to approximately 95% of the population.
We have 30-40 million people in our country who still use 2G handsets, for them migrating is more difficult as 4G smartphones are expensive.
4G handsets are costly because the government has put taxes on its import. In my opinion, its (taxes) pretty reasonable and it appears to be a successful policy for the government actually to encourage manufacturers to build manufacturing facilities here in Bangladesh. And the government of Bangladesh has put in the right pair of barriers at the border. If you’re bringing in parts, the tariffs are more, if you’re bringing in components, they are lower. So the more you get into field manufacturing, the less expensive it is to build a headset here.
And while it may have caused a bit of a challenge for people to adopt, in the long term, this is an excellent decision. As the handset prices come down, people will eventually migrate 4G handsets.

Bangladesh Telecommunication Regulatory Commission (BTRC) is targeting to commence 5G mobile network by 2023? Do you believe we are on track to achieve that target?
Well, the good news is the equipment that we’re installing right now is essentially the last generation of 4g equipment. And it’s all designed to be somewhat compatible with 5g. So when 5g happens, we will be able to launch in pockets 5g where it’s needed. But 5g will not bring a revolution of new equipment. There might be some new antennas, spectrum and baseboards in our equipment, but it will not be a massive revolution.
There are three primary services for 5g. One is ultra-high-speed mobile services; the second thing is this massive machine type communication. So, MMPC, this requires very, very small bandwidth. Many devices around the world, for example, metering, electrical grid monitoring, water grid monitoring use this technology, this can be done partly on 4g as well.
And then there’s very fast, very highly reliable low latency, 5g services for gaming or autonomous vehicles or telerobotics. So, a doctor or a surgeon doing surgery remotely over a wireless network, those things are further down in the future for us in Bangladesh, although some of it might come, some specific applications might come early like robotics, manufacturing controls or so on. Although, the business cases are further out at this moment. Eventually, every application will happen in Bangladesh as well, and it will happen pretty quick. 

Right now, we cover 71% of the population with 4G. And by the end of next year, we will have all our sites under 4G coverage which amounts to approximately 95% of the population.

How do you deal with cyber security concerns?
There are a few things that keep me awake, and I spend a lot of time worrying about, cybersecurity is one of them. The devices that we have in our hands today are the supercomputers of a decade ago. We now operate on IP networks, just like computers do. So the risks are not only from handsets but for from other entities as well. Criminals might want to get in and play games with the networks for industrial espionage or for hacking information about customers. We have a fundamental responsibility to ensure the safety of our networks for national security reasons. So it’s something we spent a lot of time on.

Grameenphone has committed to the UN SDG #10 – (Reduced Inequalities) in Bangladesh, what are the aspects of inequality does GP want to address? What are the activities you have undertaken to serve this objective?
I want to open this by saying one thing, over the last decade, the growth of the Bangladeshi economy has been about 6.5% on average. In 2018, the growth was 7.3%, and hopefully, we will surpass that rate this year (2019). It is the result of policy, vision and execution of the government and people of Bangladesh. This incredible economic growth has raised millions of people every year from poverty towards the middle class, playing a significant role in reducing inequalities. Three key technologies facilitate in reducing inequalities are medical services, electrification, and mobile telecommunications.
When you put in mobile services into a community, you end up with people having access to trade, commerce and education and security. You also ensure access to essential services like medical care, information and connectivity with your friends. And it is in itself a form it is a form of socio-economic development.
So the very nature of what we do in the industry, not just myself but my colleagues in the telecom sector, contributes to reducing inequalities from the technological aspect.
We are also moving to get more women into management, it makes the company more productive. The decisions are more robust, and you represent the client base that you serve because 40- 50% of our client base are women. We’re also developing female managers for every one of the leadership teams in the company.
Thirdly, by the end of this year, we will have trained about 300,000 adults, and a million children face to face on how to use the internet safely. We are teaching them the importance of having strong passwords, dangers of sharing real-time location and securing private information from strangers — Simultaneously, guiding them on how to use the internet responsibly.

When you put in mobile services into a community, you end up with people having access to trade, commerce and education and security.

You have been in Bangladesh for three years now.Are you having fun?
So, does it look like I’m having fun? (laugh) . I’m very passionate about being here. It has been a humbling privilege to lead a company like this that does so much good. Grameenphone pays more corporate tax than about five next companies combined. We are fully aware that 70% of daily traffic goes through our networks. In places like Sylhet and Rajshahi, if our network goes down for 10 mins (it doesn’t), the economy stops because we have 80-85 market share. So this is a privilege.

How do you like to spend your free time?
Free time!what’s that? (laugh), we have a hectic schedule but my free time is mostly spent with my family. I have two daughters in Canada who are in university, so much of my time is spent sending them money (laugh). I have remarried, my wife is a Kenyan national, she’s from Nairobi. We have a four-year-old daughter, and they share their time between Nairobi and here (Dhaka). When they are in town, that’s 100% of my time.When they are away, I spend most of my free time reading. Most of the books that I pick up now have to do with international economics or internet or international politics. I usually use the reading List of Fareed Zakaria, host of GPS on CNN. I don’t miss this program, and I like watching what he does. And so I usually pick books out of his reading list. For fiction, I’m a huge Star Trek and Star Wars fan. I’ve read 400 Star Trek novels in my life. So I know everything about Star Trek you want to know about.

From the onset, Shanta Holdings Ltd. has been mesmerizing people of this country with their designs and innovation. They have set a new standard for aesthetics and quality in the real-estate sector in Bangladesh. 

Shanta Holdings Limited is one of the most reputed real estate companies in the country as well as the only Superbrand 2018-19 in the sector. It has already captivated the hearts of Dhaka dwellers with beautiful commercial and residential buildings in affluent neighborhoods. Shanta has become a benchmark for quality and reliability.

Dhaka is one of the most densely populated cities in the world. As the population grows exponentially, living spaces are shrinking and getting more expensive. Unlike the past, owning a piece of land and building your dream home on it has become a distant possibility. Besides, the construction of a house has become too convoluted and time-consuming for the average citizen. Likewise, for most consumers, location takes precedence over other factors while considering a place to live.

After evaluating all the priorities, people are now inclined to buying flats. As a result, the prices of apartments in prime locations over the decade have escalated dramatically. Despite there being public and private efforts to create similar residential areas, there hasn’t been any real alternative to neighborhoods like Dhanmondi, Baridhara, Banani and Gulshan.

Shanta Holdings started its journey in 2005, with the commencement of construction of the first true Condominium in Bangladesh, “Digonto” in Paribagh and the first international standard Commercial building “Shanta Western Tower” in Tejgaon. Through these trendsetting projects, Shanta revealed itself to the people of the country, setting a new standard of class and quality in construction. Shanta introduced a unique perspective of design and innovation, which was non-existent in the real-estate sector. Features such as parking-free ground floor and triple-height atrium lobbies have since been followed by others. The company is unique because it undertakes projects keeping clients’ long-term benefits and functionality in mind. It rarely initiates any projects on small lands, as it limits the facilities that can be provided for the residents.

Shanta also believes in working with the most experienced professionals in specialized fields. The company works with renowned Architects, Structural Engineers, MEP Engineers, Landscapers, Lighting Experts, and Interior Designers, believing that the best designs can only be provided by the best. Every project is evaluated under the highest safety standards by professionals who have experience of working on similar projects in developed nations. Every project is undertaken, maintaining strict compliance and international safety standards. Architects also put considerable effort into ensuring adequate ventilation and natural lighting.

Shanta believes it will keep delivering international standard projects and set new benchmarks in Bangladesh. Above the general practice in the country, Shanta provides double or triple-height ground floor entries, beautiful landscaping, elegantly furnished community lounges, gyms equipped with state-of-the-art equipment, swimming pools, billiard room, steam, sauna, BBQ zone, kids play area, etcetera. In terms of safety, mechanical basement ventilation, central security system with monitoring, and modern firefighting and detection systems are standard features in all projects. Each of their projects come complemented with a combination of these modern lifestyle amenities suited to the needs of its customers. Shanta is even more particular when it comes to interiors. Other than incorporating the latest trends in modern interior design, the company also strives to make every available square foot more efficient for customers.

The company’s motto is “Setting Standards”, from the very onset Shanta has been able to reflect this in its projects. It has developed some of the most exclusive and luxurious apartments in Bangladesh, setting new benchmarks for the sector. Exquisite aesthetics and innovate designs have set the company apart from its peers. By ensuring the highest quality of customer service and a strict commitment to on-time delivery as core values, it has become synonymous to reliability among customers.

The most recently completed “The Altair” project in road 47 Gulshan, “The Polaris” situated at the heart of Dhaka Cantonment and “The Vantage” located at Banasree main road have only a few available flats for sale. There are also other large-scale projects under construction across the city in areas like Gulshan, Tejgaon, and Dhanmondi. Such as the first 40-storied commercial building in the capital “Pinnacle”, and the first twin towers “Forum”, both located on Tejgaon link road. These two landmark commercial projects are destined to change Dhaka’s skyline forever. Construction is also soon to commence of its first gated community project named “Utopia” near Mirpur DOHS, which is targeted towards the middle-income segment. Interested buyers can visit or call 16634 for more information regarding the ongoing projects.