Mobile-Money in Bangladesh: Unintended Consequences for Certain Low-Wage Workers

Background and Purpose

Financial services in the developing world are primarily targeted to individuals in the middle and upper classes. Research shows that only 41% of the adult population in developing economies have access to banking services as opposed to 90% in the developed world. This is because most individuals do not have the minimum balance required by banks; financial institutions are expensive to use; far from their residences; and intimidating for individuals from lower socio-economic backgrounds (Demirguc-Kunt & Klapper, 2012).

Amidst low levels of financial inclusion, mobile-money was first started in Bangladesh by Trust Bank in 2010 followed by Dutch Bangla Bank and bKash in 2011 with the goal of increasing financial inclusion.

This research project investigates the process and effect of building mobile-money using information-technology-based banking infrastructure in Bangladesh. This research project has the potential to extend the use of financial inclusion and financial capability theories to mobile-money in Bangladesh, while informing development practitioners on the process of increasing financial inclusion using technology.

Methods

A case study method was used to capture and better understand the concept of mobile-money, its practices, and effects. The current study used several types of data collection: (a) in-depth interviews with two key individuals who were/are part of building and operating bKash including the management and users/clients of bKash; (b) participant observation of agent-user interactions; (c) interviews with 20 users of bKash; and (d) interviews with 10 agents. Participant observation was used to understand the process via which agents bridge the gap in technological and financial literacy among users in low, middle, and high-income neighborhoods. Triangulation from these different data sources (interviews and observations) enhance the validity of the study’s findings (Mabry, 2008). Snowball sampling techniques were employed to recruit the sample. Interviews were conducted at the locations where respondents were recruited. The interview with users took approximately thirty minutes, while the interviews with bKash personnel and agents took an hour.

Results

Interviews with the users of bKash revealed three key sensitizing themes. One, women who worked at garment factories were better able to control their own incomes and resources when they used bKash as a way to store their money. Two, when bKash was used by migrant workers in cities to send money to their families in the village, it reduced the frequency of their trips to visit the family, thus reducing the strength of the ties between the migrant workers and their wives. Three, some migrant workers formed additional families in the cities, unbeknownst to their families in the village, as a way to have full lives in the city.  This was because employers were less likely to allow them to “go home” since they could send money via bKash and other providers.

Conclusions and Implications

 

There are negative unintended consequences of financial inclusion particularly for migrant workers, as opposed to garment workers in cities, in terms of relational/familial issues in a capitalist system in which they are beholden to their employers’ rules amidst low regard for rights of low-wage workers.