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Bangladesh is a key player in the global remittance landscape and a major labor-exporting country. Remittances are the second-largest economic driver after the RMG sector. According to Bangladesh Bank, the average monthly remittance inflow surged by 20% in the current fiscal year, rising from approximately BDT 222 billion to BDT 266 billion.
In FY 2024, remittances contributed 5.21% to GDP, surpassing half of the country’s total export earnings. Despite this immense contribution, remittance utilization remains constrained—primarily limited to household consumption, housing, and debt repayment—hindering its potential to fuel sustainable economic growth.
Since the mid-1970s, rapid social transformations, including population growth and economic development, have driven rural households to engage in informal economic activities and labor migration. The labor migration sector remains male-dominated, with women comprising less than 4% of migrants, according to BMET. Bangladeshi migrants are predominantly unskilled or semi-skilled, engaging in low-wage labor. This results in lower earnings compared to workers from neighboring countries like India and Pakistan, even in similar roles.
Consequently, remittance earnings barely cover migration debts, household expenses, and basic necessities, leaving little room for savings or investment. Although district-level technical training initiatives have been introduced, the transition of certified graduates into overseas employment remains low, indicating persistent challenges in leveraging skill development to enhance earnings.
The migration cycle is hindered by inefficiencies and exploitative practices, often exacerbated by middlemen, while those following informal migration paths are deprived of government and formal support. Informal migration channels fuel additional informal activities, from sourcing migration funds to sending remittances through informal channels.
These inefficiencies, along with the absence of financial products tailored to the unique needs of migrant families, a lack of formalized systems that hinder decision-making and sustain the informal migration cycle, insufficient reintegration and support systems for returnee migrants, limited support for women entrepreneurs within the remittance landscape, low financial literacy, and weak entrepreneurial capabilities, all prevent migrants and their families from achieving long-term financial stability.
In this context, the SHAFAL – Remittance Management for Socio-economic Stability of Migrant Families program, a joint initiative by the Embassy of Switzerland and UNCDF, was launched to address these challenges by focusing on enhancing the asset-building capacity of migrant workers and their families. Under the initiative “Enhancing Remittance Utilization for Sustainable Development in Bangladesh,” supported by the Embassy of Switzerland and commissioned by UNCDF, LightCastle Partners conducted a comprehensive scoping and needs assessment of Bangladesh’s remittance landscape.
This study provided an in-depth analysis of regulatory frameworks, stakeholder dynamics, and gaps in financial products and services available to remittance recipients. It also examined inefficiencies in remittance flows, barriers to productive utilization, gaps in digital financial literacy, and potential entrepreneurship opportunities. Drawing insights from six migration-prone districts and incorporating baseline indicators, key metrics, and quantitative findings, the study proposed targeted solutions and strategic interventions to enhance digital financial literacy programs and foster entrepreneurial skills, ultimately empowering remittance recipients to drive sustainable economic growth.
For this comprehensive scoping and needs assessment, LightCastle adopted a ‘Top-Down Approach,’ starting with an extensive literature review to grasp the remittance landscape in Bangladesh, develop pre-deployment hypotheses, and refine the research instruments. The team then conducted a stakeholder mapping exercise to identify and categorize key players in the remittance ecosystem, evaluating their roles, responsibilities, influence, contributions, and collaboration potential, which culminated in a detailed stakeholder mapping report.
The field research utilized a mixed-methods approach, incorporating both quantitative and qualitative tools. A total of 1,585 quantitative surveys were conducted across six migration-prone districts—Cumilla, Chattogram, Feni, Munshiganj, Narsingdi, and Tangail—targeting migrant aspirants, current migrants, returnees, and their families. The quantitative survey provided insights into socio-economic factors, awareness of remittance channels, the availability and suitability of financial products, remittance usage, financial literacy, and entrepreneurial interests.
Figure: Snippets from the field-work activities
The qualitative instruments included 16 Focus Group Discussions (FGDs) and 43 Key Informant Interviews (KIIs) with stakeholders from the public and private sectors, including supply-side, demand-side, and ecosystem actors. These qualitative methods delved deeper into the dynamics of the remittance ecosystem, identifying challenges and exploring potential strategies for improvement.
The findings from both quantitative and qualitative tools were triangulated for a holistic assessment of the remittance ecosystem, leading to a comprehensive baseline report. The LightCastle team provided quantitative insights based on baseline indicators, addressing key metrics to inform the design of targeted interventions.
The team also conducted five stakeholder consultation sessions to validate the baseline findings, gathering representatives from the private sector, development organizations, policymakers, and regulators. These sessions focused on five key thematic areas:
(2) Ensuring Effective Remittance Flow, Utilisation, and Innovation;
(3) Exploring Financial Product Innovation Opportunities in the Remittance Landscape;
(4) Enhancing Digital Financial Literacy for Migrant Workers & Families;
(5) Navigating Entrepreneurship Opportunities in the Remittance Landscape.
The sessions were organized sequentially, addressing macro-level migration and remittance issues, followed by solutions for enhancing financial well-being through product innovation, financial literacy interventions, and long-term security via entrepreneurship. A comprehensive stakeholder consultation report collated the findings from these sessions.
Figure: Snippets from the consultation workshops
Triangulating the baseline findings and stakeholder consultations, the team produced five thematic reports with strategic recommendations for interventions, covering the following areas:
This study sets the stage for UNCDF to design targeted interventions that will significantly enhance the asset-building capacity of migrant workers and their families while promoting economic empowerment for women. It underscores the need for innovative, inclusive financial products tailored to the unique socio-economic realities of migrant families.
A key takeaway is the importance of integrating financial education from the pre-migration stage, which will foster long-term economic stability and growth. Collaborative actions are already in motion, with initiatives like the partnership between 10 Minute School and bKash, which launched an online course to improve digital financial literacy among the younger generation.
Further, to unlock the entrepreneurial potential of returnee migrants and their families, mapping business opportunities aligned with their skills, interests, and financial capacity will be crucial. Pre-migration training should integrate financial literacy, digital tools, and entrepreneurship to improve migrant’s employability and women’s agency.
Looking ahead, collaboration across ecosystem players is vital to overcoming systemic inefficiencies and improving service delivery at both ends of the migration journey. This coordinated effort could pave the way for UNCDF, banks, and tech platforms to design migration-specific products and services, ranging from financial solutions to literacy initiatives.
Additionally, collaboration between UNCDF, Bangladesh Bank, and research institutes would help develop guidelines, frameworks, and policies to enhance the remittance landscape—from financial literacy to returnee reintegration and entrepreneurship development. Partnerships among service delivery providers, technical training institutes, and BMET can further improve grassroots-level training and services. Overall, this study lays the groundwork for a more integrated and effective migration and remittance landscape in Bangladesh, potentially shaping the future of migrant financial empowerment.
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