uncdf financial literacy case study imageThe Opportunity

    Bangladesh has been experiencing a rise in the uptake and usage of Digital Financial Services (DFS). As the ecosystem of financial inclusion through digital pathways are being established, Small and Micro Businesses (SMBs), particularly women entrepreneurs and rural and peri-urban small businesses, are targeted because of their significance in the economy and lack of incorporation in traditional financial services. However, despite rapid growth of access to the internet in urban areas, there is a slower rate in peri-urban and rural areas which makes it difficult for SMBs to embrace digital services.

    To address this issue, in partnership with Shopup and Ekshop, UNCDF collaborated with VISA to commission a Rapid Needs Assessment to gauge the existing level of financial and digital literacy in Bangladesh. The study concentrated on the supply and demand aspects of the DFS sector, in order to facilitate the use of digital platforms to benefit SMBs by finding out how digital and financial literacy can be delivered and used. The study further explored the current policy landscape to facilitate the digital and financial literacy for SMBs.

    LightCastle Partners was assigned to conduct the study titled, “Digital and Financial Literacy in the Bangladesh SMB Sector”, in order to gauge the state of digital and financial literacy among the SMB (Small and Micro Businesses) sector in Bangladesh. The study aimed to understand the level of literacy of the surveyed entrepreneurs, as well as to provide recommendations on how to further develop their literacy to enable entrepreneurs to leverage the upcoming digital consumer market and digital financial services.


    LightCastle utilized secondary research, Key Informant Interviews (KIIs), and surveys to conduct this study. To provide internationally comparable standards of measurement, the study was developed and analyzed using the UNESCO UIS Digital Literacy Framework, and the OECD (Organization for Economic Co-operation and Development) Financial Literacy Framework.

    diagram UNCDF Financial Literacy
    Fig 1: Key Data Collecting Instruments

    The UNESCO UIS Digital Literacy Framework provides 7 components of digital literacy, namely –

    1. Fundamentals of hardware and software
    2. Information and data literacy
    3. Communication and collaboration
    4. Digital content creation
    5. Social and digital media
    6. Problem-solving
    7. Career-related competencies.

    The financial literacy section of the study used the OECD Financial Literacy Framework, where 3 competence areas were gauged through associated indicators, namely-

    1. Access to financial services
    2. Knowledge of financial instruments
    3. Use of financial instruments

    LightCastle conducted a survey of SMB entrepreneurs split between Shop Up and Ek-Shop SMB representatives, which are B2B commerce platforms that provide various services to SMBs across Bangladesh. These surveys were conducted across the 7 major divisions of Bangladesh namely, Rangpur, Dhaka, Rajshahi, Mymensingh, Sylhet, Chittagong, and Barisal. Furthermore, Key Informant Interviews (KIIs) with 13 key stakeholders were held across the fields of Digital Financial Services (DFS) providers, insurance, traditional finance, regulatory, and SME association/foundation sectors to get a broad view on the state of digital and financial literacy within the SMB sector. Furthermore, it allowed the study to explore and understand the opportunities and challenges that exist along with enabling an understanding on how to effectively leverage and address them.

    In the Future

    By utilizing the UNESCO UIS Digital Literacy Framework, and the OECD Financial Literacy Framework the study findings were drawn from internationally comparable standards of measurement. Therefore, this study provides a baseline of digital and financial literacy in the SMB sector which can be followed up on in the future. Furthermore, any future interventions now can use this study to understand whether those interventions have made a noticeable impact.