The Opportunity

    The Bill and Melinda Gates Foundation identified Bangladesh as one of the nexus countries for driving greater financial inclusion to positively impact million lives. Currently the country has a 47% financially included population according to Financial Inclusion Insights (2018) and this is gradually increasing with higher digitization of products and services and proliferation of mobile internet users.

    The Gates Foundation commissioned two sets of industry landscaping studies: (1) to explore possibilities and challenges associated with digitization of wages in the apparel sector and (ii) to determine the prospects of digitization in the microfinance sector. Needless to say, the two sectors greatly affect the lives of people living in a low income bracket.

    Our Approach

    As the apparel industry of Bangladesh aims to gain higher export in an increasingly competitive global market, sustainability, quality and digitization have become crucial forms of differentiation and competency. Wage digitization in apparel directly affects the lives of 3.5 million people, who are employed in the industry, living under an income bracket of less than USD 150 a month.

    Wage digitization is seen to have direct positive correlation with increase in financial inclusion and currently close to a million workers in the apparel industry are drawing salaries in the form of digital wages. Apparel is indubitably a key sector in the context of Bangladesh, and greater digitization in the industry will leave compounded positive effects on the lives of a large workforce.

    Our results also suggested a 15% increase in transaction digitization can positively affect the lives of close to 4.5 million women borrowers. Digitization of transactions would not only help microfinance institutions increase efficiency but also potentially reduce interest rates and cost of borrowing for the underprivileged borrowers.

    To conduce effective assessment of these two studies, we first analyzed respective industry parameters and then developed strategies – discerning ways to accelerate usage of digital financial services (DFS) for institutional clients. Furthermore, we offered recommendations around product development to grow financial inclusiveness and DFS uptake by large institutional stakeholders. The work entailed gathering insights from a motley of stakeholders through interviews and FGDs.

    The published reports can be downloaded for free from here:

    The Future

    Currently, we are in the process of organizing a knowledge dissemination workshop that will corral multi stakeholders across public, private and development. We anticipate potential buy-ins from relevant stakeholders to act upon the recommendations that will be shared.