Ideas & Updates

Digitizing payments can add US$6.2 billion to Bangladesh’s annual GDP

© ©Better than Cash Alliance/Amit Rudro

Key public and private sector players make action commitments on responsible digitization in retail, agriculture, and ready-made garment sectors, while prioritizing women

Digital transactions in Bangladesh have grown from 5 percent to 20 percent in 5 years – an impressive four-fold increase.

April 20, 2022, Dhaka, Bangladesh - Digital payments can boost Bangladesh’s annual GDP by 1.7 percent, according to a new report by the United Nations-based Better Than Cash Alliance and its member, the Government of Bangladesh’s flagship program Aspire to Innovate (a2i). This means adding US$6.2 billion annually to the economy.

Of this, 53 percent will come from digitizing just 30 percent of micro-merchant transactions in the retail sector; 45 percent from digitizing credit disbursements in the agricultural sector; and the remaining from scaling digital wages in the informal ready-made garments (RMG) sector. Responsible payments digitization in these sectors, crucially prioritizing women, will help accelerate progress towards the Sustainable Development Goals by 2030.

“There has been a sea-change in digitization in Bangladesh. Smartphone connectivity is now universal. In this context, our new national digital payments roadmap gives clear steps until 2025. This is significant because we want to achieve the commitments made under the Sustainable Development Goals. We want our women to play a role in the digital economy at par with men,” said said Mr. M. A. Mannan, MP, Honorable Minister of Planning.

Acting on the findings from the new study, the government launched, in partnership with the UN-based Better Than Cash Alliance, the new 2022-2025 National Digital Payments Roadmap. The roadmap identifies 22 solutions to build a safe, interoperable, and inclusive digital payments ecosystem over the next three years in priority sectors of RMG, retail, agriculture, health, and education._

“There are many areas where we have already witnessed remarkable adoption of digital payments. As digital payments ecosystem grows in scale and complexity, its dependence on infrastructure increases commensurately. We are leaving no stone unturned to ensure that we build a reliable and inclusive digital infrastructure that will serve as the foundation on which digital payments and services can be built,” said Mr. Anir Chowdhury, Policy Advisor, a2i program.

Since joining the Better Than Cash Alliance in 2015, Bangladesh has made significant strides toward a digital economy, as demonstrated by the initial and latest analysis.

“Bangladesh has achieved remarkable progress towards the Digital Bangladesh vision. Digital transactions have grown from 5 percent to 20 percent in 5 years – an impressive four-fold increase. It has also withstood the impact of the pandemic by digitally delivering social safety payments, wages, and stimulus packages to citizens and industries,” said Dr. Ruth Goodwin-Groen, Managing Director at the Better Than Cash Alliance. “We look forward to continuing our work with the leaders of Bangladesh to advance digital payments nationwide, particularly for women, and share lessons from Bangladesh with our global Alliance members.”

Sector-wise analysis

Ready-made garments sector

bangladesh young woman in orange at sewing machine working in garment factory

©Better than Cash Alliance/Amit Rudro

Eighty percent of the wages in the formal RMG sector were paid digitally in July 2020, owing to the government’s stimulus package. However, in December 2021, the figure dropped to 52 percent. The new roadmap shows that this percentage has the potential to rebound if cash-out charges on withdrawing salaries from MFS wallets are lowered, the cost burden is distributed across the value chain, and efficient and effective recourse is guaranteed. The Ministry of Labor and Employment and the business chambers can help create a vibrant digital payments ecosystem, that offers a variety of use cases to workers can help the funds stay digital, reducing the need to cash-out and alleviating concerns around cash-out charges.

“The successful wage disbursement model of the garment sector can be successfully applied to other labor-intensive industries. Once the digital payments ecosystem becomes more vibrant, it will add a variety of new uses to workers, which will in turn help the funds stay digital, reducing charges and the need to cash-out.” said Mr. Tuomo Poutiainen, Country Director, International Labour Organization.

Micro, small and medium-sized enterprises

Bangladesh has around 11 million MSMEs, of which approximately 1.31 million are largely micro-merchants or mudi dokandar. World Bank estimates a financing gap of US$2.8 billion in the MSME sector, with an estimated 60 percent unmet credit need for women owned MSMEs owing to the lack of formal business documents such as trade licenses and collateral.

The roadmap recommends credit platforms and software-based POS systems which can increase the use of digital payments, and collection and tracking of both supply and demand side data to inform decision making for government, regulators, and service providers. Sex-disaggregated data can further promote inclusive policies and services for women.

Agricultural sector

Bangladesh’s agricultural sector employs half of the population. Women are heavily engaged but often remain unrecognized and unaccounted for. This sector has a credit-based system across the value chain, with only 27 percent of farmers’ subsidies transferred digitally. Payments’ digitization will help build data footprints for farmers and enable alternative credit scoring. This will provide opportunities to farmers to access formal credit, thus enabling financial inclusion and making them a more attractive segment for providers.


About a2i

The Aspire to Innovate (a2i) Programme, of the ICT Division and Cabinet Division, supported by UNDP, builds on the Government of Bangladesh’s efforts to introduce a citizen-centric culture of innovation in civil service to improve public service delivery and make services more inclusive, affordable, reliable and easier to access. The collective efforts of the Bangladesh Government have led to considerable experimentation and creation of prototype solutions. a2i builds on this momentum and provides support to establish institutional mechanisms that incentivize, sustain and scale innovations to attain sustainable impact, incorporating the private sector in this innovation process to improve public service delivery. For more details, visit:

About The Better Than Cash Alliance

Based at the United Nations, the Better Than Cash Alliance is a partnership of governments, companies, and international organizations that accelerates the transition from cash to responsible digital payments to help achieve the Sustainable Development Goals. The Alliance has nearly 80 members, who are committed to digitizing payments to boost efficiency, transparency, women’s economic participation and financial inclusion, helping build economies that are digital and inclusive. For more details, visit: