Learning how to invest for the future
"I never believed a shy girl, who only sewed clothes in a corner of her home, could ever dare to dream about opening a large-scale garment factory on her own," says Tania Akter, 30, resident of Sreepur, Adarsha Sadar Upazila in Cumilla district, Bangladesh.
Her husband, Amir Hamza, migrated to the UAE in 2018 to improve family's well-being and Tania participated in Financial Literacy and Entrepreneurial Development Training developed by Strengthened and Informative Migration System (SIMS) project. She used to make clothes at home and sell them to a boutique, but after completed the training she decided to open her own store. She currently employs 5 women and generates a monthly profit of approximately BDT 18,000 to 20,000 (around 164-188 USD). Additionally, Tania has started saving, setting aside BDT 5,000 (45 USD) each month in a bank account to ensure the future of her family and her business.
A comprehensive training
Despite remittances being the second-largest contributor to Bangladesh's national income, initiatives to promote financial literacy of migrant workers and their families at household level, particularly in rural areas, are noticeably absent. As a consequence, families often encounter significant obstacles in making informed financial decisions, effectively managing their hard-earned income, and navigating investment opportunities both in their host countries and back home.
Recognizing the need, SIMS has developed a comprehensive 17-week, approximately 4-month, training program. Each session, lasting two hours, combines discussions, group work, and practical exercises designed to enhance participants' financial literacy skills.
Since the project's inception and up to December 2023, SIMS has successfully imparted financial literacy training to 3541 left behind family members of migrants The curriculum is meticulously crafted to address the unique needs of remittance-receiving families, aiming to equip them with the knowledge and skills necessary for effective financial management.
Tania Akter, 30
A dream coming true
From January 2021 till December 2023, 3325 women like Tania participated in financial literacy training. They have used the new skills to start a successful economic activity, sometimes overcoming formidable challenges.
“When I opened my shop, I faced an intense opposition” Tania recounts. "Some of the male tailors in the area even threatened me, fearing they would lose their customers”.
“Being a woman, I naturally attract female clients who feel more at ease discussing their needs with me” she continues.” My skill level is a cut above the rest, which only added to my male competitors’ insecurities." Despite these hurdles, Tania's resilience shone through.
"It was my integrity and unwavering commitment that truly set me apart. The financial literacy training equipped me with the entrepreneurial know-how to navigate these challenges skilfully."
Tania's story is not just one of surviving in a competitive market; it's a testament to thriving through dedication, skill, and the right knowledge. Following her plans to expand the store into a mini-garment factory with additional staff and machinery, Akter is bringing her husband back to Bangladesh to grow their company together. They've also devised a rough strategy to determine who would oversee which aspect of the business, after Amir returns home in June 2024.
Pursuing her dream does not prevent Tania Akter to contribute to the improvement of her community: beside running her shop, she also teaches how to sew to women who want to be self-reliant.
Major impacts of financial literacy training
Interviews and focus groups conducted across Narsingdi, Cumilla, and Chattogram, the district where financial literacy (Fin-Lit) training was held, have highlighted the following major impacts:
- Implementation of Monthly Family Budgets for Enhanced Planning Security: Initially, none of the participants had a formal financial plan at the household level. Post-training, 40% of the graduates began maintaining daily income and expenditure accounts in writing, with an additional 20% updating their accounts weekly, demonstrating a newfound discipline in financial planning.
- Cultivating a habit of hegular savings for greater resilience: The training encouraged 60% of the participants to engage in formal savings through various schemes offered by banks, Micro Finance Institutions (MFIs), insurance companies, or through informal means. On average, each participant is now involved in at least one savings scheme, indicating a significant shift towards financial security.
- Shift towards formal remittance transfer channels: Before the program, a substantial number of participants relied on informal transfer systems. After the training, there was a dramatic shift with 89% opting for bank channels and 10% favouring mobile banking for remittances, reducing the use of informal channels to a mere 1%.
- Promotion of expense reduction for increased savings: Participants reevaluated their spending habits, identifying and reducing unnecessary expenses. This shift in behaviour has led to increased savings and a more balanced approach to financial management.
- Reducing dependency on remittances through productive investments: The program emphasized the risks associated with sole dependency on remittances and the benefits of productive investment. This encouragement has transformed consumption-oriented activities into profit-oriented ventures, notably increasing the number of farming and non-farming business activities per family.
- Empowerment of women through financial literacy: The training significantly impacted women's empowerment, enhancing their respect within the family and the wider community through improved management of household finances.
- Formation of an informal FinLit graduate network: The training fostered a sense of community among participants, leading to the creation of an informal network that supports social exchange and economic collaboration. This network continues to provide a platform for sharing business and market information, discussing educational opportunities for children, and addressing social issues and skills training availability.