Contribution of Mobile Finance

Service in RMG Industry

Business Research Methods (EIB 511)
 Acquaintance

Submitted to

Dr. Md. Kamal Uddin

Professor

Submitted by

• Md. Ridwan Chowdhury – ID: 801415022

• Md. Salman Amin – ID: 801722017
• Faiyaz Samin – ID: 801827018
 Introduction
 Mobile Financial Service (MFS) is a form of electronic banking,
by which financial institution provides services to the people
with the combination of banking and mobile platforms networks
that enables users to perform banking transaction.

 In 2011, the central bank of Bangladesh issued guidelines for

Mobile Financial Services (MFS

 In recent years Ready-Made Garment (RMG) in Bangladesh are

trying to disbursed the salaries through MFS service.

 This provide easier financial excess to the factory workers.

 Background of the study
 From management perspective, salary payments through MFS
increases efficiency and cost-saving in the long term, while reducing
the security risk involved in handling large sums of cash.
 From the workers perspective, it increases transparency and
accountability in the factories by requiring businesses to keep track
of employee working hours and wages paid, alongside reducing
social and economic vulnerability by providing female factory
workers with easier financial access.
 As mobile phone uses has grown rapidly, mobile technology and
mobile products become more affordable and accessible in
Bangladesh. This has also given rise to a new generation of financial
services.
 Literature Review
 Business research is the application of the scientific method in searching for the truth
about business phenomena. These activities include defining business opportunities
and problems, generating and evaluating alternative courses of action, and
monitoring employee and organizational performance.
 Exploratory Research Exploratory research is conducted to clarify ambiguous
situations or discover potential business opportunities.
 Descriptive Research It Describes characteristics of objects, people, groups,
organizations, or environments; tries to “paint a picture” of a given situation.
 Probability sampling It is a sampling technique in which every member of the
population has a known, nonzero probability of selection.
 Cluster sampling cluster sampling involves in dividing the population into various
subgroups, but each subgroups need to have similar characteristics to the whole
sample.
 Univariate statistical analysis tests hypothesis involving only one variable.
 Bivariate statistical analysis tests hypothesis involving two variables.
 Multivariate statistical analysis tests hypothesis involving multiple variables
 Problem definition
– Broad objective
• Main objective of the research is to determine
the contribution of MFS in the digitization
process of wage distribution in RMG sector of
Bangladesh. Usage percentage of MFS in total
digital adaptation is the contribution of MFS in
the digitization process of wage distribution
process in RMG sector of this country. Also their
convenience of use is another focus of this study.
 Problem definition
Symptom analysis
• Mobile banking is usually defined as carrying
out banking business with the help of mobile
devices such as mobile phones.
• Currently, workers are paid almost exclusively
in cash. But in recent days number of MFS users
among RMG worker grows exponentially.
• Her project (2014) revealed that MFS rapidly
growing mobile technology based financial
service providers in Bangladesh exclusively
expanding by including the millions of women
RMG workers.
• In this study we try to find out the contribution
of MFS in salary payment of RMG workers &
try to provide a comparative picture in salary
disbursement through different financial
channel.
Analysis of the situation
• a recent study focused on RMG workers
indicates that
only 5% of the workers have access to any form of
financial services
• Contribution of the $30-billion readymade
garments (RMG) sector, employing nearly four
million workers, mostly women, to Bangladesh
economy is undeniable.
• The industry has been growing at an average rate
of 17 per cent annually since 1980s.
• At the moment, a large majority of these factories
pay workers in cash, often having them queue up
on payday and face the security risk of transacting
in cash.
• The fact 80% them are women, many of whom
lack financial literacy and access to formal
financial services, further aggravates the
situation.
 Problem definition
Problem identification Determination of units
• Literacy of the workers & staffs. • Total workers
• Ease of access to digital wage distribution.
• Adoption process determination. • Salary distribution process
• Adoption rate of the garments. • Number of type of salary
• Adoption process against the type of
workers.
disbursement procedure
• Adoption rate for each type of employees • How comfortable are the
against the type of digital wage
distribution process.
workers with the MFS
• Determine the significance level for digital usage.
wage distribution process adoption.
• Determine the significance level for MFS
in digital wage distribution process
adoption.
 Problem definition
Determination of variables
• Number of Executives / staffs.
• Number of Workers
• Number of staffs on cash salary distribution
• Number of staffs on mfs salary distribution
• Number of staffs on bank salary distribution
• Number of staffs on digital money salary
distribution
• Number of workers on cash salary
distribution
• Number of workers on mfs salary
distribution
• Number of workers on bank salary
distribution
• Number of workers on digital money salary
distribution
Research questions
• What are the pros & cons associated with the
current method of salary payment?
• What is the level of digital literacy among
garment workers and how does it contribute to
the use of digital services?
• What is the level of digital literacy among
garment workers and how does it contribute to
the use of mobile money services?
• Level of difficulty to conduct using existing
methods among the employees?
• What types of transactions are conducted the
most and how frequently are they used?
• What is the level of ease of access to digital
wage distribution among the owners of the
garments?
• For which level of employees (staffs & workers)
employers have adopted the digital wage
distribution process.
 Problem definition
Specific objective statement Hypothesis
• Find out the type of wage distribution • Hypothesis 1
process adopted by the garment
employers – H0 = Digital adaptation is
• Find out the type of employees served insignificant & more than 30%
by the processes – H1 = MFS has insignificant
• Find out the number of employees contribution in the digital wage
served by each wage distribution distribution process doesn’t
process. exceed 30%
• Find out the contribution of digital wage
distribution amongst the all the wage
distribution process • Hypothesis 2
• Find out the contribution of MFS – H0 = more than 50% of the users of
amongst the all the digital wage MFS are comfortable
distribution process
– H1 = less than 50% of the users of
MFS are uncomfortable
 Research Design
Survey Analysis:
• In our survey design, we surveyed 40 RMG
workers & staff in two factories located at
GAZIPUR. Among them 28 are RMG
workers & rest are different level
staff/Executives.
• 80% are active MFS user of which 42.50 %
people currently take their salary/wage
through MFS. Despite this yet only 7.5%
workers uses MFS platform completely to
meet their daily expenses & this is happen
because of high service charges.
• However 55% among the total participant
is comfortable enough to use MFS in daily
basis which is significantly impact the
digitization process in salary disbursement.
Sampling
• Probability sampling
Probability sampling utilizes from of random
selection. Under this probability sampling the
method of cluster sampling was used.
 
• Cluster sampling
Clusters that were used for the analysis was based
on workers employed by two garment
manufacturing garments in Gazipur region.
Selection of sample size:
Here, confidence level = 90%
Due to time constraints & the COVID-19 situation
the significance level was selected at 10%
instead of 5% & data was analyzed on a sample
size of only 40.
n = z2 pq = z2 p(1-p)/E2
p 0.3
q=1-p 0.7
sample 228
 Analysis of the data
Proportion Analysis: Convenience analysis
To test the hypothesis use Z proportion test was
used which is a Univariate Statistical analysis To test the hypothesis II we use X 2 chi-square test & data
because of involving one variable. recorded in contingency table.
Here with the significance level of 5% it can be
assumed that there is a significant number of
users of MFS in RMG sector.
χ2 = ∑(O-E)2 / E
Hypothesis Testing:
The hypothesis in this paper shows that  
The data for comfort of use can be recorded as followed
H0 = π > 0.3 Observed value

Salary Type Comfortable Neutral Uncomfortable Total

Disbursement Number Percentage Staff 7 5 0 12
Channel
Worker 15 8 5 28
Bank 18 45.00%
MFS 17 42.50%
  22 13 5 40
CASH 5 12.50%

Given the sample proportion and significance Hypothesis Testing:

level 10%, z = 1.65 & probability of 42.50%
Hence, zobs = (p- π)/sp = (.425-.3) / (0.072456884) 2
= 1.725
Here the zobs value 1.725 is more than the cirtical
value, z = 1.65
Thus we accept the hypothesis, h 0 = π > 0.3
From the upper table we can hypothesize that H0 > 50%
Again from the above formula we find that χ2 = 2.620713
The χ2 value of 2.620713 here is well within the 10%
significance level with df = (3-1) x (2-1) = 2 critical value of
4.605.
Hence we accept the null hypothesis H 0 > 50%
 Conclusion
• The ready-made-garments (RMG) sector is the major
drivers of Bangladesh’s economy but financial services for
RMG workers are still extremely poor.
• Salary disbursement is still a complex system and time-
consuming process for the most of the workers in RMG
sector of Bangladesh.
• A large portion of workers are out of reach of banking
services and they do not have enough time to go to bank
for banking services.
• MFS is growing fast in serving the need of the workers
more.
• Still a lot of workers are not properly educated for the use
of the MFS.
• Garment & textile factories and MFS providers can jointly
play a vital role to include all the RMG workers in financial
services and allow them to access a range of financial
services.