Providing the option of transferring money fast at an affordable cost, mobile financial services have improved the lifestyles of garment workers and their relatives in rural areas, according to a new study.
Rural households also reduced borrowing, increased savings and saw gains in health, education and agricultural productivity, said Prof Jonathan Morduch of New York University.
Moreover, the households were able to better cope with losses in agricultural productivity and health shocks, Morduch said while presenting the findings of a study in a seminar at Six Seasons Hotel in Dhaka.
The International Growth Centre (IGC) Bangladesh, Innovations for Poverty Action, and the Brac Institute of Governance and Development of Brac University jointly organised the report launching.
Sultan Hafeez Rahman, country director of IGC, Bangladesh, moderated the programme where experts, businessmen and academicians were present.
The urban migrants also experienced changes, such as growing interest in formal employment, particularly in garment industry and reporting being less healthy, although the latter is possibly a reflection of long work hours in the garments sector, Morduch said.
“They also saved more and were less likely to be poor. Overall, the results suggest that mobile banking has an insurance function. It increases the welfare of rural households but has mixed effects on the welfare of migrant workers,” he said.
The professor investigated the impacts of obtaining a mobile financial services account on the wellbeing of a group of garment factory workers in Dhaka and their relatives in rural Rangpur.
He focused on two important trends which he said was changing Bangladesh. The first is rapid urbanisation, spurred by the growth of the garment sector, and the availability of industrial jobs. The second is the rapid spread of mobile banking.
Prof Christopher Woodruff of the University of Oxford said women comprised over three quarters of sewing operators in the garment sector while less than 5 percent of sewing supervisors.
“One solution to the supervisory skills shortage is to increase rates of promotion of women. We examine challenges in promoting women into supervisory roles through experimental work with partner factories,” he said.
He found three challenges that need to be overcome. These are a lack of self-confidence of female supervisor candidates; the tendency of other operators, especially males, to discourage them; and often ambivalent attitudes of senior managers.
“Imperfect information about jobs poses a major challenge for workers in developing countries. As a consequence, workers learn about jobs in ad hoc ways and have incomplete information when making employment decisions,” said Laura Boudreau, a PhD student of the University of California Berkeley. Readymade garments industry is one of the key drivers of economic growth and poverty reduction in Bangladesh and research in this area is of utmost importance, said Salahuddin Kasem Khan, president of Bangladesh Employers' Federation.
Ali Ahmed, chief executive officer of Bangladesh Foreign Trade Institute, and Md Khairuzzaman Mozumder, chief of party of USAID TFA, also spoke.