The impact of remittances on the socio-economic development of Bangladesh is immense – there is no disagreement about this. Generally, there are two ways that expatriate Bangladeshis can send remittances to their families back home – cash remittance and digital remittance. According to BRAC Bank’s “Shifting from cash to digital remittances during the pandemic: A case study of BRAC Bank in Bangladesh,” digital remittances have increased more than cash remittances. According to the report, digital remittances accounted for 37% in 2019, rising to 75% in 2020.
Recently, this insightful report of BRAC Bank prepared on remittances from United Nations Capital Development Fund (UNCDF) in Bangladesh has been published and highlighted the issue of remittances received through digital channels.
According to the information of Bangladesh Bank, before the pandemic, i.e., till December 2019, the portion of remittances received through MFS providers of Bangladesh was only Tk. 30 crores, which increased to Tk. 384 crore in April 2022. Due to the lockdown during the corona pandemic, the tendency to personally attend the bank or agent to receive cash remittances has decreased a lot, so people’s interest in digital remittances is increasing, said the UNCDF study.
According to the UNCDF study, after the pandemic in 2020, the concerned authority assumed that the volume of remittances coming to Bangladesh might decrease, which would hurt the country’s economy. In addition, if money does not come in, the standard of living of expatriate families in the country will decrease. But, in 2020, while the total remittances received by other countries fell by 1.6%, the inbound remittances in Bangladesh increased by 18%.
The report shows that 86% of digital remittances are less than $200, equivalent to 30% of the bank-received and 19% of cash-received remittances in 2021. Among the countries that send most of the remittance to Bangladesh, South Korea, Singapore, and the UK is mention-worthy because significant mobile wallet channels have been developed in these countries, and the expatriates can send even the lowest amount. On the other hand, Malaysia, Qatar, and Saudi Arabia channels are still dominated by large transactions, so the uptake of mobile wallets has been lower in these countries.
The report also states that although 60% of total remittance recipients in Bangladesh are women, only 37% of them are digital remittance recipients of BRAC Bank. Because there is a lack of digital and financial literacy among women in this country. Also, they are less interested in going digital. For example, 65% of women in Bangladesh own mobile phones, whereas 84% of men use mobile. Also, 43% of adult women have a bank account compared to 63% of men.
According to the study, About $22 billion of remittances came through formal channels before the Corona pandemic broke out, where $14.5 billion came through informal channels.
UNCDF and BRAC Bank are collaboratively trying to improve Bangladeshi remittance recipients’ access to digital channels and strengthen the VAS and use of remittance-linked services.