Digital Finance and Economic Empowerment: Experimental Evidence on the Role of Transaction Costs


Bangladesh is a rapidly developing economy facing complex gender dynamics. The Global Gender Gap Index, a broad measure of gender parity, ranks Bangladesh 50th out of 153 countries overall1. However, women in Bangladesh fall far behind men in terms of economic participation and opportunity. Increasing the financial market participation of Bangladeshi women holds the potential to reduce these inequities. However, transaction costs are a major barrier to financial access, both in Bangladesh and worldwide. While digital financial services (DFS) can reduce these costs relative to traditional financial services, evidence suggests that women may value these cost reductions differently than men. Identifying the role of transaction costs in women’s demand for DFS can potentially close gender gaps across a wide variety of economic indicators, and ultimately advance women’s economic empowerment (WEE).


This project investigates the mediating role of transaction costs on the relationship between DFS and WEE. The study will explore the role of direct transaction costs, such as fees to use DFS, and indirect transaction costs, including time spent setting up a DFS account and traveling to a DFS agent. The research team will examine whether women perceive the benefits of reduced direct versus indirect transaction costs differently by designing an experiment that separates the two. The team will also attempt to quantify the extent to which these estimates differ between men and women to assess whether reduced transaction costs can facilitate WEE. 

Proposed impact

There is no existing evidence that specifically explores the mediating role of transaction costs between DFS and WEE. Moreover, existing evidence indicates that the role of transaction costs on women’s use of DFS is context-specific. This study will expand the evidence base to address this topic in the Bangladeshi context. Finally, evidence from this study can inform how stakeholders, such as DFS providers and development partners, design future DFS solutions to optimize transaction costs for increased financial inclusion and WEE.

1World Economic Forum (2020). “Global Gender Gap Report 2020” Available online, (accessed November 17, 2020)

Photo credit: Jeremy Bishop on Unsplash


Associated Institute: BRAC Institute of Governance and Development

Associated Investigators: Khandker Wahedur Rahman (Lead PI), BRAC Institute of Governance and Development; Jeffrey R. Bloem (Co-PI)

Country: Bangladesh 

Implementation Partners: Shakti Foundation for Disadvantaged Women (Shakti Foundation)

WEE-DiFine thematic areas: transaction costs; velocity of transfers; opportunity cost of time; mobility; access to financial services