Sarathi is currently in its 30-month (January 2018- June 2020) scale-up phase. The project’s interventions for this phase were designed based on background research and lessons learned from the pilot phase (January 2016 - July 2017). To expand the scope of financial inclusion of RMG workers in Bangladesh, the project felt the need to collect further evidence and information for the development of suitable banking products and services for this unbanked segment of the population. Sarathi project commissioned and conducted the study through Innovision Consulting Private Limited to gain a better understanding of the income and expenditure patterns and financial needs of the RMG workers. It also looked into the level of financial knowledge of the RMG workers about existing financial products and services offered by commercial banks. A part of the study focused on collecting baseline data relevant for Sarathi’s project outcomes. The study also attempted to identify the various communications channels that are available, accepted and popular among RMG workers to enable greater reach to the target population. The study has aided Sarathi in finding the baseline data of all the key indicators that the project set to monitor and measure Sarathi’s impact.
One of the indicators assessed has revealed the number of access points (such as agent points, ATM machines and bank branches) per 10,000 RMG workers in a district. The study reports that currently there are, on average, 18 access points per 10,000 RMG workers in a district. At the project’s locations, the numbers are: 31 for Dhaka, 4 for Gazipur, 21 for Chattogram and 10 for Narayanganj. Sarathi aims to see an increased number of access points as a result of facilitating its partner commercial banks in establishing alternative delivery channels in the project locations.
Among the surveyed respondents, 33% have expressed a preference of receiving their salary through a formal financial institution. About 60% of the respondents indicated having some knowledge on the benefits of having a bank account. The benefits recalled by the respondents include the possibility of savings (41.3%), availability of loans against the account (28%) and safe transactions (16.7%). However, the two main problems that the respondents identified were: the complex documentation requirements and the difficulty in understanding instructions given by the banks to clients. These findings will help Sarathi provide its partner commercial banks direction to make the account opening procedures easier for the RMG workers as well as the bank staff.
In order to find effective delivery channels to reach the RMG workers, Sarathi wanted to know about the practices generally followed by the RMG workers in obtaining information about financial services and their level of reliance on these sources. The study shows that 69.9% of RMG workers seek information from their family members and 48.1% from their extended families. A majority of the RMG workers (61.6%) identified family members as the most trusted source for gathering knowledge. They have also identified direct interaction with the bank officers (35%) and television programmes (23.1%) as other trusted sources.
The study has found that the average expense of an RMG worker is BDT 10,674 per month. The largest share of their expenses are incurred through payment of house rent (22%), remittances sent home (19%) and purchase of food items (13%). The project has taken estimates of 23 expenses that the RMG workers typically incur in a month. Despite these expenses, 27.2% of the overall respondents save at least some amount of money. Among these, 43.9% utilize Deposit Premium Scheme (DPS) as a means to save. Two other popular means include: saving at home (13.6%) and saving through microfinance institutions (21.2%). The RMG workers who have bank accounts save an average amount of BDT 1,550 per month.
The study indicates that 13.5% of the RMG workers have reported that they would want to avail personal loans (13.5%). Among them, 21.8% of male RMG workers and 54.5% of female RMG workers wanted the loan for the construction of a home in their village. Similarly, 38.2% of male RMG workers and 18.2% of female RMG workers wanted the loan to invest in a business. The demand for loans is greatest among the RMG workers earning within a range of BDT 15,000 to BDT 24,999 per month.
Sarathi is working with commercial banks and RMG factories to bring RMG workers, especially women, within the sphere of formal banking services. Through wage digitization, the project empowers RMG workers to conduct financial transactions as account holders and clients. The project activities are directed to find market-based and scalable solutions that address underlying constraints such as inadequate financial literacy; lack of access to formal banking services; and commercially viable business solutions for commercial banks to cater to the needs of the RMG workers.
The dissemination session opened with a welcome speech from Mr. Anirban Bhowmik, Country Director, Swisscontact Bangladesh. Mr. Kazi Mahfuz Mamtazur Rahman, Team Leader, Sarathi-Progress through Financial Inclusion and Mr. Md. Rubaiyat Sarwar, Managing Director, Innovision Consulting Private Limited introduced the project and presented the key findings of the study respectively. The dissemination workshop included a group work session and open discussion on case studies developed by the project team. These case studies facilitated the engagement of the guests on possible ways to achieve financial inclusion of RMG workers.
Sarathi- Progress through Financial Inclusion is jointly funded by MetLife Foundation and Swisscontact.