Utilization of Remittance in Bangladesh by Migrant Families: A Micro-level Inquiry in Five Selected Upazilas

Remittance has become a significant contributor to the Bangladesh economy. As migrant workers from Bangladesh gradually increased over the years, the amount of annual remittance to the country rose significantly. According to the World Bank, Bangladesh now stands as one of the largest recipients of remittances. The country received almost $15 billion as of June 2019 in the 2018-2019 financial year. There is a definite correlation between macro-economic policies and the flow of remittance. But both flows of remittances and their uses in Bangladesh have not been guided by any notable policy framework. Hence to maximize the flow of remittance and reap benefits from it at the domestic front, it is imperative to have a concerted policy effort. However, limited empirical works had been done about the actual productive purposes of remittance at the domestic level. This paper tries to understand the level of productive uses of remittances at the domestic level and also to find out barriers to productive uses of it.


INTRODUCTION
Remittances, sent by migrant workers, play a very significant role in earning foreign capital for the least developed and developing countries. According to the United Nations Department for Economic and Social Affairs (UNDESA), the worldwide number of international migrants was 258 million in 2017, and remittance accounted for more than 2 percent of GDP in all developing countries (World Bamk 2019). Thus remittance has become a critical issue in the globalizing world as it directly contributes to economic growth, consumption patterns and poverty reduction in these countries.
Bangladesh has a long history of outward migration and has become one of the most crucial sources of supplying working force to developed and developing countries around the world. Working abroad is becoming a vital livelihood strategy for many people in Bangladesh. Remittances have already emerged as a prime driving force of economic growth and poverty alleviation in Bangladesh. It has obtained the second position among foreign currency earnings of Bangladesh, and the amount of remittance inflow to Bangladesh is now more significant than the total amount of foreign direct investment (FDI), and official development assistance (ODA) flows to Bangladesh. 2 Formally the export of the workforce from Bangladesh started in 1976. In this year, a modest number (6087) of workers have gone to the Middle East for employment and had sent 5 crore USD remittance to Bangladesh (BMET 2012). After that, the amount of remittance and the numbers of migrant workers have been increasing gradually. Bangladesh is the tenth-largest remittance recipient country in the world despite being the seventh-largest immigrant country, as about ten million people are working abroad (World Bank, 2016). The total remittance earnings from Bangladeshi migrants from 1990-91 to 2017-18 was around US$ 177.944 billion (Bangladesh Bank 2019).
Despite the extensive literature on the subject, many issues relating to the flow and use of remittances remain inadequately understood. The main focus of this study is to examine how remittance is used at the family level and to recommend some policy measures to improve the productive use of remittances.
The impact of remittance in the recipient countries largely depends on the pattern of its uses by the beneficiaries, particularly how much of the remittance is being used for consumption or health care, education, debt reduction, savings, investment, etc. Though it is not easy to establish such a relationship, in recent times policymakers, researchers have been giving more emphasis on this aspect of the relationship between remittance and socio-economic development as this indicates productive use of funds.
In Bangladesh, a significant portion of remitted money is spent for consumption purposes and only a small part for productive purposes (Siddique and Abrar 2003;Afsar et al. 2002). As a result of such consumption-oriented practices, it adds little value to the overall economic development of the country. Thus, this study is an effort to answer why recipient households do not use the money for productive purposes.
This study aims to explore the pattern of using money received from Bangladeshi expatriate workers. The study's specific objectives are:  To identify significant uses of remitted money by the recipient households.  To identify the causes of not investing the remitted money in productive purposes. This paper consists of five sections. After the introduction, section two presents the literature review, while section three provides the research methodology. Section four presents the discussions and results, while the final section offers the policy recommendations and conclusion.

LITERATURE REVIEW
Remittance means the funds foreign worker sends to his or her country of origin. As per World Bank's (2015) definition, remittance covers all the money flows through worker's remittances, employee's compensation, and migrant transfers. These peer to peer transfers of money across the borders are economically significant for the recipient countries. In literature, three issues have received particular attention, i.e., socio-economic condition of migrants, the process of migration, and the uses of the remittance at household levels (Habibullah 1980;Mahmood 1986Mahmood , 1990Mahmood ,1991. The issue of uses of remittance is directly relevant to this study. What percentage of remittance will add to investment resources is mostly dependent upon the savings and expenditure patterns of the recipients. Therefore, an in-depth look at the income, savings, and utilization pattern of remittance is of considerable significance from the policy point of view. Upliftment of the standard of living is very crucial in every society. Remittance can have a substantial impact on that of recipient households through increased spending on education, health, and other household consumption. Remittance typically goes to daily and house-related expenses, with 60 percent covering immediate household expenses, construction, and renovation. Other expenses include education, purchase of appliances and domestic goods, ritual costs, and health care (Cohen, 2004). However, Stahl and Habib (1989) revealed that foreign remittance earnings serve as a stimulus to consumption expenditure to recipient families with significant multiplier effects. Still, only a little share of remittances are straightway used up on productive investment goods.
Moreover, Tom De Bruyn (2006) revealed that the cost of per person migration in Bangladesh is the highest among the regional countries. And in our case, it is approximately 4.5 times higher than GDP per capita. Barua et al. (2007) find that the income differential between origin and destination country positively relates to the inflow of remittances. If we examine the utilization of remittances, we find that researchers have struggled in mapping remittance investment patterns.
Evidence from studies done by Siddique and Abrar (2003) and Afsar et al. (2002) show that priority of remittances uses are mainly to meet day to day needs of the family, rather than investing in the productive sector, thus losing the multiplier effect for benefitting the household and the broader community. It was found that the purchase of land by remittance funds was found top priority of the migrant families (Mahmood 1986;1991). Construction and repair of houses and the purchase of durable goods also dominated the expenditure pattern of migrant families. Though existing literature discusses the different uses of remittance at the micro-level, very little has been suggested in terms of effective use. Besides, the concept of effective or productive use of remittance needs to be clearly articulated. However, understanding the impacts of remittances on expatriate families, and how the remittances are used within households will help to identify the migration effect through remittances; and to find ways on how this remitted money can be used for a better life, for instance, expenditure on education, health, housing, and sanitation.

RESEARCH DESIGN AND METHODOLOGY
This article is an exploratory study designed to identify the significant uses of remittance by the recipient households. For this purpose, data were collected from households having expatriate workers working in foreign countries for at least five years. This study dealt with secondary and primary data. Secondary data were gathered from existing literature and government documents related to migrants and remittance of various ministries. Primary data were collected using both quantitative and qualitative methods. The research design is based on mostly qualitative data and descriptive, reflecting information gathered through interviews with a semi-structured questionnaire, crosschecked by Focus Group Discussions (FGDs). The research also used some quantitative data to collect the demographic details of the respondents. The study also interviewed eleven key officials to verify the results.

Study Area and Study Population
From BBS's (2015) data, we found that people from every district of Bangladesh are going abroad for works and sending money back home. Considering the number of migrants, according to the International Organisation of Migration (IOM), the top five districts are Chattogram, Cumilla, Brahmanbaria, Tangail, and Dhaka (IOM 2018).
This study selected some Upazilas from the districts mentioned above by carrying out a preliminary investigation. The study population was those who send remittance to Bangladesh and the beneficiaries. The study collected primary data by conducting one set of semi-structured questionnaires, where remittance senders and households were the respondents. The respondents were selected first through stratified sampling. The research respondents were 200. This data was crosschecked and reinforced by conducting three Focus Group Discussions (FGDs). The interviewees were selected by using purposive sampling because it is the only way to choose the right person from the right place.

Socio-Economic Characteristics of the Studied Population
For the study, data were collected from two hundred remittance earning households from ten villages of five selected districts. The socio-economic characteristics of the surveyed population are described below.

Age Distribution of the Respondents Household Members
Three fourth of the studied population belongs to the working-age group 18-56 years. Among them, almost one fourth stayed abroad for work. Only 4.8 percent of the respondents are above 57 years of age. And the size of the studied households is 6.10, which is significantly high compared to that of the national level of 4.5 (HIES,2010:9; BBS 2012).

Sex Ratio of the Respondents Family Members
The sex-wise distribution of the studied household families shows that 51 percent of the respondents' family members are male, and the rest are female. The gap between males and females is about 2 percent, which is significantly high in comparison with national-level data. Among the studied population, 219 males and 31 females have been staying abroad for work.

Education
According to BBS (2011), the literacy rate in Bangladesh is 53.3 percent. But in the study area, the literacy rate is almost 67.52 percent. The highest literary rate was found in Tangail (72%), and the lowest literacy rate was found in Chattogram (61%). The study shows that among the literate, the educational level of 51 percent was up to high school level (VI to SSC), and 36 percent were from the primary level.

Occupational Pattern of the Respondents' Family Members
It was found that a significant portion (21.9 %) of the respondents' family members are working abroad, and this is their principal profession. The data revealed that self agriculture is the principal profession of 7.8 percent of respondents, and 1.8 percent of respondents are involved in agriculture as a secondary profession. Besides this, 2.7 percent of respondents are engaged in agriculture labor as the principal profession. Only 2 percent of respondents are involved in business either as principal or secondary profession. Therefore, a major group of the respondents' household family members (more than 60 %) is not involved in any kind of economic activity, and this group consists of homemakers, children, students, disabled and senior citizens.

Duration of Staying Abroad
The study revealed that the percentage of single-members from respondent families residing abroad for work is very high (73.33%). But it was found that households have a comprehensive strategy to send more family members abroad. It is comparatively easy for those who have small businesses overseas, and they can bring in people for their business through a free visa. But it is a costly way of going to Middle Eastern countries. A person having a free visa has a vast opportunity to get any job in small businesses in Middle Eastern countries. Therefore, a free visa is an attractive issue for potential migrant workers.

Figure 1: Duration of Staying Abroad
The amount of remittance earnings and its economic strength mostly depends on the duration of staying abroad for an individual migrant. The study found that more than 50 percent of migrant workers stayed abroad for more than eight years and less than one third lived abroad for five to eight years. The rest have been staying abroad for more than five years but not at a stretch. The findings revealed that 55 percent of respondents remitted their money monthly, while 34 percent did so quarterly. And rest 11 percent of respondents sent remittance on a half yearly basis. Besides, on the occasion of social and religious festivals, they usually send more remittance to the family. Among the migrant workers, those who work in the formal sector or on a contract basis can send money every month as they receive their salaries regularly.

Channel of Remittance Flow
To send remittances, respondents use both formal and informal channels. It usually depends on the availability of channels or which are less time consuming and less procedural as well. The Hundi 3 , an unofficial channel of sending remittance, is one of the most popular channels of sending money because of its quickness, easy accessibility, and less transaction cost. In most cases, it does not require any document or paper. The findings revealed that 81 percent of respondents used formal channels in sending money, while 65 percent used both formal and informal channels.

Utilization of Remittance
The study found remittance sent by expatriates is mostly used for consumption purposes. All most 90 percent of remittances were used for meeting basic needs. Among these, 40.46 percent is used for food consumption, and rest are used as non-food expenditure percent on education, 4.7 percent on health treatment purposes, 18.07 percent land purchase, percent on marriage and other festivals, and 5.26 percent on house management. Experts described these as a failure of the concerned authority to act on diverting inward remittances into "productive" sectors instead of consumption.

3
Hundi is an informal financial instrument that is used as a form on money transfer from place to place or person to person in trade transaction. In this system, money transfer takes place outside the banking channels.

Monthly
Quarterly Half Yearly Festival

Type of Investment by Remittance
The study revealed that almost 90 percent of the remittance is used for consumption purposes. So, the respondents can save only a small amount of money for future investments. Most of the recipients spent everything they received, and the study exposed that only 27 percent of respondents can save their money, and the rest of the 73 percent are spending the remitted money to bear their day to day expenses. In the study, it was found that a very few of the respondents had invested a portion of remittance in multipurpose cooperatives. But their experience was not good at all. Most of the multipurpose cooperative societies experienced delays and institutional setbacks, and as a result, the small investors could not bring back their investment. However, 67 percent of respondents indicated that financial institutions could be a potential sector for investing their money.
About a fourth of the respondents said that SME could be another potential sector for investment. But for that, they need institutional support from the government in respect of capacity building and market information.

Unwillingness to invest
It has been found that the respondents who could save some money, are not very willing to invest in any productive business. Only 21 percent of respondents invested their savings. The respondents offered a long list of reasons when they were asked about their unwillingness about the investment of savings. A large proportion of answers were related to the risk factors of investment. They mentioned that investment in the study area was too risky, and they were not able to manage the risk related to investment. Besides, they also mentioned few other reasons for not investing money, such as lack of qualified people in the family to manage the investment in a proper way, inadequate savings, cumbersome procedures to start a new business, an uncertain inflow of remittance from abroad, knowledge gap, i.e., information about market and finance, high cost and red tape, etc.

Potential Sectors for investment
When the respondents were asked in which areas they like to invest if they had the chance. They gave a wide range of answers. One quarter (24.5 percent) of all responses was in favor of opening a private company and providing services. 17 percent were interested in investing in real estate. 15.5 percent of respondents believed that savings are a positive form of investment and wanted to increase their current savings level. Detail of the finding is shown in the table below. Most of the respondents mentioned that they would need government support and a favorable environment to start small enterprises.

FOCUS GROUP DISCUSSIONS (FGDS)
The research team arranged three focus group discussions (FGD) in different districts. A total number of 23 migrant workers joined the discussions. The respondents of one FGD were female migrant workers, which was held in Singair Upazila of Manikgonj District.  Regarding the use of remittance, the respondents viewed almost the same opinion, as mentioned in the survey results discussed above. The remitted money was mostly used in family consumptions and welfare, mainly health and education purposes, and as a result, it improved the living standard of the family. Some other views also came up in FGDs, such as: a) Remittance helped to elevate their social position, b) Sometimes they had to work for a long time but were not paid an extra salary for that. c) The cost of going abroad is so high. In many cases, they had to take a loan from family members or friends, and it took a long time to repay that money from the remittance. So, they could not save adequate money to invest. Apart from that, the female participants of the Focus Group Discussion mentioned that remittance helped to elevate their social position. Some of them pointed out that they often faced harassment in the workplace and did not get a full salary, which they were assured of before departing the country.

DISCUSSIONS WITH KEY OFFICIALS OF THE SECTOR
The research team interviewed 11 key officials from Ministry of Expatriates' Welfare and Overseas Employment (MoEWOE), Bangladesh Bank, Agrani Bank, Bureau of Manpower, Akter Employment and Training (BMET), Bangladesh Overseas Employment and Services Limited(BOESL)and Bangladesh Association of International Recruiting Agencies (BAIRA) and wanted to know three things from this interview with them. These are: what is the utilization pattern of the remitted money send by the migrant workers, how to minimize the cost of migration, and what are the areas to be considered as potential sectors for investing remitted money.
In the interviews, most of the interviewees pointed out that almost 60-70 percent of remitted money is used to meet the household expenditure, and a minimal amount of money could be saved from this remitted money. They also pointed out that with this small savings, they usually spent this money for purchasing land and building or repairing houses. Actually, in most of the cases, remittances are not found to be put to productive use. They underscored that due to lack of training of workers, they earn less compared to the skilled labor of other countries, and also for high migration cost, they have to utilize the money to repay the loan in the first 2/3 years. For these reasons, in the initial stage, the migrant workers actually could not save adequate money for productive investments. They also mentioned that due to the presence of intermediaries and lack of awareness, the cost of migration in Bangladesh is higher than other manpower exporting countries. The Government of Bangladesh has taken some policy measures to reduce the obstacles of the remittance flow and other problems of the sector. Some of the important measures are digitalization in migration management, Establishment of Expatriates Welfare Bank, Promotion of skill development training for potential migrant workers, the initiative for the smooth transfer of remittances, and incentives for using formal channels for sending remittances, initiatives to reduce migration costs, etc.
The summary of the key officials' interview can be shown in the following flow chart

MAJOR FINDINGS OF THE STUDY
Remittance plays an essential role in the socio-economic activities of migrant families in Bangladesh. The study identifies some potential sectors subject to government support, where the migrant family can invest their money and also identifies the problems and difficulties of such investment. The significant findings of the study are as follows: 1. A large number of male members work as migrant workers abroad. In forty percent of the households of the studied villages, at least one member is abroad and planning to send more persons abroad in the near future. Though three-fourths of the total households own agricultural land, service abroad has become the principal livelihood of the studied families. This indicates that in the study area, there is a shift in livelihood patterns. 2. Remittance is mostly used for regular household consumption. It has been found that the quality of consumption in foodstuffs and non -food products has improved considerably due to the increased remittance inflow to the family. And this indicates that a rise in consumption practices is probably affecting the use of remittance in productive sectors. 3. The cost of foreign migration in Bangladesh is considered to be higher than in other countries sending manpower worldwide. The cost migration for a female worker was observed to the lower compared to her typical male counterpart. Bangladeshi migrant workers had to pay several times more than the stipulated government fees. And the migrant workers have to collect this money by taking loans from informal sources. And families at home after receiving the remitted money, they have the first priority to repay the loan as early as possible. For this reason, in most cases during the first two years, the migrants' families do not get any opportunity to save remitted money. This means that little amount of money is left to make any investment after repaying loans and meeting the consumption needs of the families. In fact, most of the study population are unskilled workers whose earnings are usually low. 4. Due to the volatility of remittance flow, a good number of recipient households were not interested in investing the savings money in any business, instead, hold on their savings to hedge any unanticipated disruption in the flow of funds. 5. Although the percentage of remittance income investment in the productive sector is not very impressive, the respondents identified specific sectors as prospective sectors for investment, such as private enterprises, real estate, small industries, financial institutions, and agriculture. Since their experiences with cooperative societies were not very good as some households faced problems with profits and investments from multipurpose cooperatives. Thus, investment in real estate, such as land and house building, is preferred as a prime area of investment to the respondents. 6. The Government of Bangladesh has recently made some efforts to tackle the problems mentioned above and to facilitate employment in foreign countries. The establishment of Probashi Kallyan Bank (PKB), Government to Government (G2G) process of sending expatriate workers abroad, the introduction of a database of potential migrant workers is among these crucial efforts. 7. Reducing migration costs and reducing the tendency to send remittances via informal channels by Bangladeshi workers is the immediate issue that the government has taken into account. In this respect, the Probashi Kallyan Bank (PKB) was established in 2011 by the Government of Bangladesh to fund workers going to work abroad, to facilitate the sending of refunds and to reduce migration costs. PKB is lending potential migrant workers. 8. To reduce migration costs, MoEWOE is currently implementing several awareness programs to reduce the role of intermediaries. The Ministry estimated that, on average, approximately 77.1 percent of the total migration costs went to the pockets of middle people. The government is also considering several regulations to reduce migration costs substantially. 9. The government has taken some initiatives to export skilled migrant workers. BMET and other training institutions started to some programs, especially language courses and demanddriven short courses for the prospective migrant workers.

CONCLUSION AND RECOMMENDATIONS
Remittances have received a lot of attention in Bangladesh in recent years. However, the impact of transfers on a broader context would not be possible until household panel data and macro data integrated into the national database are available. Most migration and remittance studies were context-specific and descriptive. In this context, in light of the findings of this study, the following recommendations can provide policymakers with useful insights for policy decisions- Bangladeshi migrant workers had to pay several times more than the stipulated government fees, and they have to collect this money by taking loans mostly from informal sources. And after receiving the remitted money by the migrants family at home, they have the priority to repay the loan as early as possible. For this reason, in most cases during the first two years, the migrants family does not get any opportunity to save remitted money. To curb the cost of migration, the government should take necessary measures to reduce the role of intermediaries and should also consider several regulations to control the migration costs.

Provide adequate training to create more skilled workers
Bangladesh sends mainly unqualified and semi-qualified workers abroad, especially in the Middle East. But nowadays, there is a huge demand for skilled workers all over the world. Bangladesh needs to tap these potentials and take necessary measures to train and educate the prospective migrants in line with the demand of those countries. The government has to play a key role in this regard, especially to maintain the international standard and quality of training and education. Governments in Thailand and the Philippines invest in training workers before they are sent abroad, and as a result, they can remit more funds back home.

Exploring Sectors for investment
The government should take necessary steps to create opportunities for remittance recipient families to invest their surplus money in productive business and to enhance their accessibility to the financial market. Therefore, the government should take appropriate measures to encourage them and to create a conducive environment of investment for them.

Provision of Specific Programmes by GOB
To improve investment, the GOB needs to provide specific district-based business and investment advice to migrant families and migrants themselves and to raise awareness campaigns to promote these programs. The GoB should also investigate particular factors, such as suboptimal infrastructure, or a lack of essential business facilities, complicated procedures that impede investment projects in the area in question.

Ensuring remittance through formal channels
This research has shown that several types of money transfers, including the Hundi system, are regularly used. The government should, therefore, focus on enabling migrants to send and use their remittances productively, according to their own needs. The Central Bank must ensure that the National Commercial Banks (NCBs) open more branches in rural areas with adequate facilities for the management of remittances and issue clear directives to facilitate healthy competition and contribute to an increased flow of remittances. And foreign missions should periodically organize campaigns, seminars, and discussions to encourage migrants to use a formal channel to transfer money to their homes.

Formulate Policy for effective use of Remittance
The study reveals that migration as a strategy of livelihood is still a general feature of a lower and lower-middle-income group of the society. Households belonging to these groups often lack any supplementary source of income. As the male person of the family works abroad, the female head of the family runs the economic and non-economic activities of the households. This requires them to learn financial dealing with others and coping with the digitized system. In terms of policy intervention, the government should take a comprehensive financial management system so that rural women can participate in it easily. Finally, it needs to be pointed out that recommendations of the study to improve the productive uses of remittance largely depends on the role of the government and the financial institutions. Therefore, three issues principally need to be addressed by the state soon, and they are; bold steps to reduce the cost of migration, creating better incentives for productive use of remittance, encourage the use of the official channel for remittance sending and awarenessraising program. In this context, an appropriate policy and incentive package would go a long way to attract migrant workers who send remittances to their homes, which would ultimately result in significant savings to be invested in the productive sector.

REFERENCE
Afsar R, Yunus M, Islam ABMS 2002, Are migrants after the "golden deer"?: A study on the cost-benefit analysis of overseas migration by the Bangladeshi labour, IOM Regional Office for South Asia, Dhaka.