Bangladesh is the world’s second largest garment exporter, with the ready-made garment (RMG) sector accounting for over 83% of the country’s exports and contributing approximately 16% to the GDP. This industry encompasses more than 4 000 RMG factories and provides employment to approximately 4.2 million workers of which almost 60% are women. Even though the RMG sector plays a pivotal role in Bangladesh’s economy, only 34% of it was integrated into the formal financial system when Swisscontact started to work towards the financial inclusion of RMG workers and their community members in 2016. At first the project promoted scalable existing and customised market-based solutions. It addressed various underlying constraints, including inadequate financial literacy and lack of access to formal banking services by RMG workers, inefficiencies of cash-based RMG factories and insufficient commercially viable business solutions for commercial banks to cater to the specific needs of RMG workers. In the past three years however, the country’s financial sector has undergone notable transformations thanks to technological advancements. Simultaneously, the financial inclusion rate of the RMG sector reached approximately 68% by 2021 through the remarkable initiatives taken by the government, industry, private organisations and the implementation of Sarathi project.
Component 1: Improving the financial health of RMG workers
Component 2: Up-skilling female RMG workers
The project goals for the second phase (November 2021 – April 2024) are:
The Sarathi – Progress through Financial Inclusion project was one of the pioneering initiatives in Bangladesh that promoted the financial inclusion of RMG workers and their community members. It had done so by establishing effective partnerships with relevant stakeholders to promote wage digitisation, financial literacy, and access to suitable financial products that also benefited the RMG factories and commercial banks. Thanks to the project, RMG workers had for the first time access to formal financial services through their newly opened bank accounts, awareness regarding the benefits of formal financial services, and the necessary financial knowledge required to avail those services, such as formal savings and credit opportunities. The experience of designing and implementing sustainable business models helped Sarathi understand the industry dynamics and the needs of RMG workers and their community members, which now serves as a building block for the ongoing project.
The Sarathi project is financed by the MetLife Foundation and the Happel Foundation. It is part of the Swisscontact Development Programme, which is co-financed by the Swiss Agency for Development and Cooperation (SDC), Federal Department of Foreign Affairs FDFA.