In 2018, UNCDF undertook a Landscape Assessment of Retail micro-merchants in Bangladesh with the purpose of highlighting key characteristics of this segment and identifying opportunities to support the sector. The study highlighted the need to support micro-merchant development, especially by advancing access to digital financial services and digital financial literacy.
This mixed method research estimated that there are over 1.3 million micro-merchants in Bangladesh whose businesses are small and informal, but together these small businesses delivered an annual turnover of $18.42 billion in 2018. Micro-merchants appreciated that the use of digital technologies across their operations can help their businesses, but the use of digital technologies was still low. Approximately 43% of micro-merchants had a bank account, 68% borrowed from microfinance institutions, and 30% had a mobile financial services (MFS) account.
Micro-merchants play a critical role in providing access to goods and services to millions of customers, but the UNCDF study highlighted financial exclusion as well as lack of digital accounts, business training, and business development support as some of the key impediments facing micro-merchants. Considering the study findings and impediments faced by micro-merchants, this policy note outlines number of suggestions to promote micro-merchants/micro enterprise development to maximize inclusive economic growth.