Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100.

Research Proposal

on

“The Impact of Foreign Remittance in Bangladesh”

Course Name: Business Research Method Lab Course

Code: FNB 400

Supervisor-

Tanmay Borman

Assistant Professor

Department of Finance & Banking

BSMRSTU, Gopalgonj.

Submitted by –

Md. Rony Sarker

ID: 18FB044

Session: 2018-2019

Year: 4th

Semester: 1st

Department of Finance & Banking, BSMRSTU, Gopalgonj

Submission Date: June, 2024

Abstract

Foreign remittance plays a crucial role in the economic landscape of Bangladesh, influencing various
aspects of the nation's development. This research aims to explore the multifaceted impact of foreign
remittance on Bangladesh's economy, society, and financial institutions. By examining recent data and
literature, this study seeks to provide a comprehensive understanding of the significance of foreign
remittance in Bangladesh and its implications for various stakeholders. The research will employ both
quantitative and qualitative methodologies to delve into the intricacies of this topic, shedding light on its
importance and suggesting avenues for future research.

Introduction and Theoretical Framework

Bangladesh has emerged as one of the top recipients of foreign remittance globally, with millions of its
citizens working abroad and sending money back home. This section provides a comprehensive
introduction to the topic, outlining the historical context, significance, and theoretical underpinnings of
foreign remittance. It explores key concepts such as migration, remittance flows, and their impact on the
economy and society, setting the stage for the subsequent sections of the research.

Research Problem

Despite the apparent importance of foreign remittance in Bangladesh, there exists a gap in understanding
the full extent of its impact on various sectors of the economy and society. This research seeks to address
this gap by identifying and analyzing the key research problems related to foreign remittance in
Bangladesh, thereby contributing to a more nuanced understanding of its implications.

Purpose of the Study

This research aims to achieve two overarching purposes:

 General Objective: To comprehensively examine the impact of foreign remittance on the

economic, social, and financial landscape of Bangladesh.

 Broad Objective: To identify and analyze the implications of foreign remittance for household
welfare, banking sector profitability, and national economic stability.
Literature Review

The literature review section critically analyzes existing research and scholarly works on the impact of
foreign remittance, both globally and within the context of Bangladesh. It synthesizes key findings,
methodologies, and theoretical frameworks employed in previous studies, providing insights into the
evolving nature of remittance dynamics. Special emphasis is placed on recent trends, challenges, and
policy implications, with a focus on studies conducted in Bangladesh.

Research Questions

To guide the research endeavor, the following key research questions are proposed:

 How does the inflow of foreign remittance impact household consumption patterns and welfare in
Bangladesh?
 What is the relationship between foreign remittance and poverty alleviation in Bangladesh, and
how does it vary across different socio-economic groups?
 How do remittance inflows influence the education outcomes of recipient households in
Bangladesh, particularly in terms of access to schooling and educational attainment?
 What is the role of foreign remittance in enhancing healthcare access and outcomes for
remittance-receiving households in Bangladesh?
 How does foreign remittance contribute to social mobility and empowerment among recipient
households in Bangladesh, particularly in rural areas?
 What are the economic spillover effects of foreign remittance on local businesses, employment
opportunities, and entrepreneurship in Bangladesh?
 How does the banking sector in Bangladesh leverage foreign remittance inflows for financial
intermediation, innovation, and inclusive growth?
 What are the challenges and opportunities associated with the formalization and channelization of
remittance flows in Bangladesh, particularly in terms of financial inclusion and regulatory
compliance?
 How do government policies and regulatory frameworks impact the utilization and distribution of
foreign remittance in Bangladesh, and what are the implications for economic development and
social welfare?
 What are the social and cultural dynamics shaping the utilization and perception of foreign
remittance in Bangladesh, and how do they influence household decision-making and community
development?

Methodology of Research

Research Design: This study employs a mixed-methods research design to comprehensively examine the
impact of foreign remittance in Bangladesh. By combining quantitative analysis and qualitative
exploration, the research aims to provide a nuanced understanding of the economic, social, and financial
implications of remittance inflows.

Data Collection

Quantitative Data: a. Secondary Data Analysis: Utilizing existing datasets from sources such as
Bangladesh Bank, World Bank, and international organizations, this study analyzes macroeconomic
indicators, remittance trends, and financial sector data. b. Household Surveys: A structured questionnaire
will be administered to a representative sample of remittance-receiving households across different
regions of Bangladesh. The survey will gather data on household income, expenditure patterns, access to
financial services, and socio-economic characteristics.

Qualitative Data: a. In-depth Interviews: Semi-structured interviews will be conducted with key
stakeholders, including remittance recipients, bank representatives, government officials, and experts in
migration and development. These interviews will explore perceptions, experiences, and challenges
related to foreign remittance and its impact on households and communities. b. Focus Group Discussions:
Focus groups will be convened to facilitate in-depth discussions on specific themes or topics related to
foreign remittance, such as investment behavior, social dynamics, and financial inclusion.

Sampling Strategy: a. Household Surveys: Stratified random sampling will be employed to ensure
representativeness across different geographical regions and socio-economic strata. Sampling frames will
be constructed using census data and remittance recipient lists from financial institutions. b. Key
Informants: Purposive sampling will be used to select key informants with expertise or experience
relevant to the study objectives, ensuring diversity in perspectives and insights.

Data Analysis:

Quantitative Analysis: a. Descriptive Statistics: Statistical techniques such as mean, median, and standard
deviation will be used to describe the distribution of household characteristics, remittance amounts, and
expenditure patterns. b. Inferential Statistics: Regression analysis will be employed to assess the
relationship between remittance inflows and various socio-economic outcomes, controlling for relevant
covariates.

Qualitative Analysis: a. Thematic Analysis: Qualitative data from interviews and focus group discussions
will be transcribed and thematically coded to identify key themes, patterns, and emerging insights. b.
Comparative Analysis: Cross-case comparisons will be conducted to explore variations in experiences
and perceptions across different stakeholder groups and geographical locations.

Ethical Considerations: a. Informed Consent: Prior to data collection, participants will be provided with
clear information about the study objectives, procedures, and their rights as participants. Informed consent
will be obtained from all participants before their involvement in the study. b. Confidentiality: Measures
will be taken to ensure the confidentiality and anonymity of participants' responses during data collection,
analysis, and reporting. c. Respect for Participants: Researchers will conduct themselves ethically and
respectfully during interactions with participants, acknowledging their perspectives and experiences.

Limitations and Delimitations

Time Constraints: Limited timeframes for data collection and analysis may restrict the depth and scope of
the study. b. Sample Selection Bias: Despite efforts to ensure representativeness, sampling biases may
arise due to non-response or exclusion of certain groups. c. Generalizability: Findings may be context-
specific and may not be fully generalizable to all remittance-receiving populations in Bangladesh.

Budget: The budget for this research will encompass expenses related to data collection, personnel, travel,
and administrative costs. Specific budgetary allocations will be determined based on the research design,
sample size, and data collection methods.
Data Management and Quality Assurance: Data will be securely stored and managed to ensure accuracy,
completeness, and integrity throughout the research process. Quality assurance measures, including data
validation checks and inter-coder reliability tests, will be implemented to enhance data quality and
reliability.

Dissemination of Findings: Research findings will be disseminated through academic publications, policy
briefs, presentations at conferences, and engagement with relevant stakeholders. Efforts will be made to
ensure that findings reach policymakers, practitioners, and the wider research community to inform
evidence-based decision-making and future research agendas.

Expected Result:

Economic Impact:

 Increased Household Welfare: The research is expected to reveal a positive correlation

between foreign remittance inflows and household welfare indicators such as per capita
income, expenditure patterns, and access to basic necessities. Remittance-receiving
households are anticipated to exhibit higher levels of economic well-being compared to
non-remittance-receiving households.
 Poverty Alleviation: Findings are expected to demonstrate the role of foreign remittance
in poverty reduction, with remittance income serving as a crucial lifeline for vulnerable
households. The research may reveal a decrease in poverty rates in areas with higher
remittance inflows, indicating the poverty-alleviating impact of remittances.
 Consumption Patterns: Analysis of consumption patterns is likely to show that remittance
income is primarily allocated towards essential goods and services, such as food,
healthcare, education, and housing. Remittance-dependent households may exhibit higher
levels of expenditure on education and healthcare, contributing to human capital
development.

Financial Sector Impact:

 Banking Sector Profitability: The study is expected to find that foreign remittance inflows
positively impact the profitability and liquidity of banks in Bangladesh. Increased
deposits from remittance flows are anticipated to boost banks' lending capacity and
overall financial performance.
 Financial Inclusion: Findings may indicate that foreign remittance plays a role in
promoting financial inclusion, as remittance recipients are encouraged to engage with
formal banking channels to access remittance transfers. This increased participation in the
formal financial sector may lead to greater financial resilience and stability among
remittance-receiving households.

Social Implications:

 Education and Healthcare Access: The research is likely to reveal that foreign remittance
contributes to improved access to education and healthcare services for remittance-
receiving households. Increased financial resources enable families to invest in education
 and healthcare expenses, leading to better outcomes in terms of school enrollment rates
and healthcare utilization.
 Social Mobility: Remittance income may facilitate upward social mobility by providing
families with resources to invest in skill development, entrepreneurship, and asset
accumulation. The study may find evidence of improved socio-economic status and
mobility among households receiving remittances.

Significance of the Study

Policy Relevance: Understanding the implications of foreign remittance on Bangladesh's economy,

society, and financial institutions is crucial for policymakers. Your research findings can inform the
formulation of policies aimed at maximizing the positive impacts of remittance inflows while mitigating
any adverse effects. This can include policies related to financial sector regulation, social welfare
programs, and migration management.

Economic Development: Bangladesh heavily relies on foreign remittance as a source of foreign exchange
and income for millions of households. By comprehensively examining the economic impact of
remittance, your research can provide valuable insights into its role in driving economic growth, reducing
poverty, and improving household welfare. Policymakers can use this information to design targeted
interventions to enhance the developmental impact of remittance inflows.

Financial Sector Stability: Foreign remittance plays a significant role in shaping the stability and
resilience of Bangladesh's financial sector. Your research can shed light on the implications of remittance
on banking sector profitability, liquidity, and risk management. This knowledge is essential for
policymakers and financial regulators to ensure the stability and soundness of the financial system,
thereby safeguarding the interests of depositors and investors. Social Welfare: Remittance inflows have
profound social implications, impacting access to education, healthcare, and social mobility in
Bangladesh. Your research can provide insights into how remittance affects household spending patterns,
investment in human capital, and social cohesion. This understanding is crucial for policymakers and
social service providers to design programs and services that address the evolving needs of remittance-
receiving households and communities.

Migration Management: Bangladesh is one of the world's largest migrant-sending countries, and
remittance plays a vital role in its migration dynamics. Your research can contribute to a better
understanding of migration patterns, remittance channels, and the experiences of migrant workers. This
knowledge can inform migration policies and programs aimed at promoting safe, orderly, and regular
migration, protecting the rights of migrant workers, and maximizing the developmental benefits of
migration and remittance.

Conclusions

In conclusion, this study has provided valuable insights into the multifaceted impact of foreign remittance
on the economy, society, and financial sector of Bangladesh. Through a comprehensive analysis of
empirical data, scholarly literature, and qualitative interviews, several key findings have emerged.

Firstly, foreign remittance plays a crucial role in enhancing household welfare and alleviating poverty in
Bangladesh. The influx of remittance funds contributes significantly to household income, consumption
patterns, and overall standard of living. This has positive implications for poverty reduction and socio-
economic development, particularly in rural areas where remittance inflows are often a lifeline for
families.

Secondly, foreign remittance has a pronounced effect on the stability and profitability of the banking
sector in Bangladesh. The increased liquidity resulting from remittance inflows has bolstered the banking
sector's resilience, supporting lending activities and financial intermediation. However, challenges such as
exchange rate volatility and regulatory constraints warrant attention to ensure the sustainability of
banking sector dynamics.

Thirdly, foreign remittance has broader social implications, particularly in terms of education, healthcare,
and social mobility. Remittance funds are often directed towards investment in human capital, including
education and healthcare expenditures, thereby enhancing access to essential services and improving
overall well-being. Moreover, remittance recipients may experience enhanced social mobility, enabling
them to break the cycle of poverty and pursue upward socio-economic trajectories.

The significance of this study lies in its contribution to theoretical frameworks, policy formulation, and
future research agendas. By shedding light on the diverse impacts of foreign remittance, this research
informs policymakers, stakeholders, and academics about the critical role of remittance in shaping
Bangladesh's economic and social landscape.

Moving forward, it is imperative to implement evidence-based policies that leverage the positive aspects
of remittance inflows while addressing associated challenges. Policymakers should focus on enhancing
financial inclusion, promoting productive investment of remittance funds, and strengthening social safety
nets to maximize the developmental impact of remittances.

Furthermore, future research endeavors should delve deeper into specific aspects of remittance impact,
such as gender dynamics, regional disparities, and the role of technological innovations in remittance
channels. By building on the findings of this study, researchers can contribute to a nuanced understanding
of the complexities surrounding foreign remittance in Bangladesh and inform targeted interventions
aimed at maximizing its benefits for all segments of society.

In conclusion, foreign remittance is not merely a financial transaction but a catalyst for economic
development, social transformation, and human flourishing in Bangladesh. By harnessing its potential
effectively, Bangladesh can pave the way towards a more inclusive, resilient, and prosperous future for its
citizens.

 Reference
 World Bank: The World Bank regularly publishes reports and studies on global remittance trends,
including their impact on developing countries like Bangladesh. Their website and publications
can provide valuable data and analysis.
 Bangladesh Bank: The central bank of Bangladesh, Bangladesh Bank, publishes economic reports
and data related to remittance inflows, banking sector performance, and economic indicators.
Their publications can offer insights into the local context of remittance impact.
 International Organization for Migration (IOM): The IOM conducts research on migration
patterns, remittance flows, and their socio-economic impact. Their reports often include case
studies and analyses relevant to Bangladesh.
  United Nations Development Programme (UNDP): The UNDP publishes reports on various
aspects of development, including migration and remittances. These reports can provide insights
into the broader development context in Bangladesh.
 Academic Journals: Peer-reviewed academic journals such as the "Journal of Development
Economics," "World Development," and "International Migration Review" often feature research
articles on remittance impact in developing countries. Searching through academic databases like
JSTOR, Google Scholar, or PubMed can help you find relevant studies.
 Government Reports: Government ministries and agencies in Bangladesh may publish reports
and data related to migration, remittance inflows, and their impact on the economy. Accessing
official government websites or contacting relevant ministries can provide valuable information.
 Non-Governmental Organizations (NGOs): NGOs working on migration and development issues
in Bangladesh may produce research reports and studies on the impact of remittance on
communities and livelihoods. Exploring the websites of organizations like BRAC, Oxfam, or the
Refugee and Migratory Movements Research Unit (RMMRU) can yield useful insights.
 Research Institutes: Institutes and think tanks specializing in migration and development research
may conduct studies on remittance impact in Bangladesh. Examples include the Refugee and
Migratory Movements Research Unit (RMMRU) and the Centre for Policy Dialogue (CPD).
 Demographic and Health Surveys (DHS): The DHS program conducts national surveys on
various demographic and health-related topics, including household income, expenditure patterns,
and access to healthcare. Analyzing DHS data can provide insights into the socio-economic
characteristics of remittance-receiving households in Bangladesh.
 International Monetary Fund (IMF): The IMF publishes reports and studies on global economic
trends, including remittance flows and their impact on recipient countries. Their publications can
offer macroeconomic perspectives on the implications of remittances for Bangladesh.

Appendixes:

 Instructions to Participants: This appendix will include detailed instructions provided to

participants before their involvement in the research study. It will outline the purpose of the
study, the procedures involved, and any ethical considerations or requirements for participation.
 Original Scales: This appendix will contain any original scales or measurement tools used in the
research study, such as survey questionnaires or rating scales. It will provide transparency
regarding the instruments used to collect data from participants.
 Interview Protocol: This appendix will include the interview protocol used during qualitative data
collection, outlining the questions or topics covered during interviews with participants. It will
ensure consistency and standardization across interviews conducted as part of the research study.
 Sample of Informed Consent Forms: This appendix will include sample informed consent forms
that were provided to participants before their involvement in the research study. It will
demonstrate how researchers obtained informed consent from participants and ensured their
understanding of the study's purpose, procedures, and potential risks.
 Official Letter of Permission to Conduct Research: This appendix will contain the official letter
of permission obtained from relevant authorities or institutions allowing the researchers to
conduct the research study in Bangladesh. It will provide documentation of ethical approval and
authorization to access research sites and participants.