Personal Financial Planning Practices of the Middle Class in Bangladesh: Implications for Financial Inclusion

Goal-based financial management and planning for future financial needs is a critical element for individuals’ wellbeing in the modern world. Lacking the ability to identify key financial needs may negatively affect one’s standard of living and lead to adverse consequences. Like other aspects of individuals’ lives, culture plays an important role in shaping attitudes and, consequently, financial planning practices. In this respect, the literature lacks studies from developing countries and south-east Asian cultures. This study aims to address this gap by undertaking an exploratory investigation of the personal financial practices of the emerging middle class in Bangladesh. Using surveys and interviews, we find that immediate financial needs and family financial wellbeing are central to the financial concerns of the middle class. We found previous financial hardship, along with perceived wealth, to drive savings and other financial planning practices. However, findings also suggest poor knowledge of and lack of trust in financial products and services which may jeopardize financial inclusion. Orchestrated efforts from professionals, advocacy groups, and regulators are needed to build trust in the financial system and facilitate financial inclusion—a key component for economic growth and societal advancement in a developing country such as Bangladesh.