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Sarathi – Progress through Financial Inclusion

The Ready-Made Garments (RMG) industry of Bangladesh is among the largest sectors within the country’s economy, employing around 4.5 million workers and with a predominantly female workforce. There are 3,500 production facilities registered as exporters and another estimated 7,000 RMG factories that supply the exporters operating in the country. Enormous growth in the sector has continued to generate employment opportunities for workers with low level of skills. Most belonging to this demographic have no land and few, if any, financial skills. As a result, they are unable to manage their own finances. In addition, only about 5% of the RMG workers are able to access financial services. These services are provided, in part, through private cooperatives which often have questionable legal status. Formal financial services, such as opening bank accounts, are seldom provided.

The Project

Building on the success of the Pilot Phase (2016 – 2017), Sarathi will ensure that at least 60,000 RMG factory workers have access to formal financial services through their bank accounts over a period of 30 months. As a result of owning bank accounts, these 60,000 RMG factory workers will receive their salaries in their respective bank accounts and be able to access and use other financial products, i.e. loan, savings, term deposit and credits to meet their financial needs.

These 60,000 bank accounts will enable 30 RMG factories to transition from cash-based wage system to digitised wage system, which will significantly reduce:

  • factories’ person-hours allocated to operate cash-based wage system, and
  • cost of financial operations.

By working with at least three partner commercial banks and the 30 RMG factories, the project will help to set up multiple access points (e.g. agents, ATM booths, etc.) for RMG workers to conduct financial transactions. Additionally, these RMG factories will prove to be more compliant with their respective buyers in Europe, North America, etc. by ensuring transparency in the wage system. Consequently, RMG buyers will have significantly contributed to the financial inclusion of RMG factory workers by making digitised wage system a pre-requisite amongst all their sourcing factories.

Project activities

Sarathi has two essential components:

  • Development of financial services and supply channels for banking services to reach previously underserved market segments
  • Improvement in the level of financial skills and knowledge of RMG workers so that they can conduct formal bank transactions

Prospective interventions:

Engagement with RMG factories in developing a digital wage payment system for RMG workers will be conducted through:

  • Training and deploying female agents and bank staff to cater to the predominantly female demographic
  • Supporting commercial banks in deploying an integrated service delivery model
  • Conducting financial counselling sessions, awareness campaigns and practical usage of banking products and services
  • Introducing digitised wage payment system through Alternate Delivery Channels (e.g. ATM, Biometric POS terminal, Agent banking outlets, Digital Kiosks, etc.)
  • Supporting commercial banks in developing and introducing salary accounts and savings and loan products for RMG workers
  • Supporting Bangladesh Bank in institutionalising an efficient agent banking outlet approval process


Results from the Pilot Phase: (30.12.2015 – 31.07.2017)

  • Two partner commercial banks, Bank Asia and NRBC Bank Limited, developed and launched two new financial products, which included a saving scheme and Deposit Pension Scheme (DPS) with a minimum deposit of BDT 200 and maximum BDT 5,000 per month over a tenure of three/five/seven or 10 years.
  • 6,000 RMG workers attended financial counselling sessions at their respective factories.
  • 15 agent outlets were operationalized by the end of December 2017.
  • over 1,200 RMG workers (almost all of them are women) now have bank accounts with two commercial banks (Bank Asia and NRBC Bank Limited) in Bangladesh.
  • Access to credit with competitive interest rates: The RMG workers now have access to loans at 11% interest rate on their savings accounts. The interest rate (which ranges from 12.5% to 31.3% ) charged on this loan is significantly lower than the interest rates charged by microfinance institutes in Bangladesh.

Swiss Foundation for Technical Cooperation
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