bKash, the leading mobile financial service (MFS) provider in the country, has sustained a Tk104 crore loss in the past nine months alone, which is nearly 100% more than that of the same time last year.
bKash officials are saying, the company is spending quite a lot in their effort of expanding overall business and adding new services, which is a contributing factor in the amount of loss it has suffered.
According to the company's financials, bKash has been sustaining losses since 2019. From January- September 2020, its loss stood at Tk52 crore, while the year-on-year loss this year has increased to Tk104 crore.
In the last nine months, bKash made a total earning of Tk487 crore, while it paid employee salaries and Taxes in the amount of Tk519 crore.
While 15 mobile financial service providers are operating in the country, only two-three companies are dominating the sector with bKash leading from the front both in terms of services and scope of operation.
Speaking on the matter a senior bKash official told The Business Standard that the company is increasing its investment in their effort to introduce new technologies in the digital financial services and this is a strategic decision.
"Other than new digital services, which are being added, we are investing in various sectors including training of agents, human resources, infrastructure development and because of this there have been losses for the last few years," he said.
"However, we are already getting good results from the investments that we have made," added the official expressing confidence in making a profit in the near future.
"We publish reports every six months. Ownership, which includes the World Bank and BRAC Bank, in our company is transparent. The owners know the technology well and their choice of investment is a conscious one. They didn't take dividends when the company was in profit, rather they chose to invest the sum," the official revealed.
Although bkash, a mobile financial services company established in 2011, has been profitable from the beginning, it has not seen any profit after 2018. In that year, bKash earned a net interest income of Tk 573 crore, of which the company spent Tk419 crore throughout the year and the net income stood at Tk53 crore.
Since then, both bKash's income and expenditure have increased and the company has been sustaining losses for three years. In 2019, the net loss was Tk 63 crore. The company suffered the same amount of loss in 2020. During the first nine months of this year, the company faced a loss of Tk104 crore.
Requesting anonymity, a senior official at the central bank told The Business Standard, "Valuation of IT sector businesses are determined based on their growth, not earnings. That is why companies try to focus on their growth more, even when they sustain losses. Because growth in a company is good, it will reap benefits in the future."
He added that considering the average daily transactions of bKash, which is around 1 crore, it seems that they are investing more in the development of systems.
"However, we cannot comment on a particular company. We always see how much the customer's money is protected and whether the money in their account is going otherwise," he added.
At present, an average of Tk 2,141 crore is being transacted through mobile banking services every day. As per the August data, the number of registered customers of mobile banking is 10 crore 43 lakh and 64 thousand. Of the total transaction, bKash accounts for 65 per cent of transactions, 19 per cent of transactions are done through Rocket and the rest are done through remaining mobile banking services.
However, although Nagad, in reality, accounts for the second-highest transactions, Bangladesh Bank is not including Nagad in their reports as the company is yet to avail a license.
BRAC Bank currently holds 51% equity shares in bKash. Out of the remaining equity shares, 29% is held by Money in Motion LLC (a company listed in the US), 9.9% is held by International Finance Corporation (IFC), and the rest 10.1% is held by Alipay Singapore.