Digital Financial Inclusion and Remittances: An Empirical Study on Bangladeshi Migrant Households

Abstract

Globally, large numbers of adults remain unbanked, and most of them live in rural areas of the Third World. The recent outbreak of the COVID-19 pandemic has shown us how inequalities in accessing financial services continue to affect us. However, digital financial inclusion has emerged as an effective tool used to tackle socioeconomic ills and drive economic development. In fact, due to these modern technological developments, the number of studies in this area is very limited, especially in the context of developing economies. This study examines the impacts of migrant remittances on digital financial inclusion within households in Bangladesh by using the Migration and Remittance Household Survey. To meet the research objectives of this study, a household survey was conducted and 2165 households interviewed in 2022–2023 in Bangladesh. The survey data collected was tested using univariate and multivariate estimations. This study finds that the coefficient of remittance has positive relationships with the probability of e-bank accounts and the use of mobile banking for a household’s financial transactions. However, the use of ATM cards by households for financial transactions has not been significantly affected. The article concludes that remittance flows may enhance access to and use of means of digital financial inclusion by reducing some of the barriers and costs in Bangladesh, which could greatly contribute to the country’s economic growth by creating and increasing a strong fund for investment. The findings of this study can help in taking various steps to facilitate the most powerful financial sector of Bangladesh, namely, remittance management.