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Earn a cent,
Spend a dime,
Be it good days,
Or hard times,
Daughter wedding,
Left with nothing,
But piling debt.
Could not make it
When rivers inundate.
But life is easier
When there is microcredit.

My endeavor with a little study on rickshaw puller is finally over. I spent three hectic weeks in November and few days in December in 2019 to glean the desired information. The 40-respondent strong survey is intended to comprehend the spending and savings behavior of a typical rickshaw puller. The learning is amazing and new. It opened a whole new world where "out of sight, out of trust" means savings have to be visibly present right before one's eyes. In the previous post, I brought the house rent issue of a rickshaw puller under scanner. Here I dig deeper and divulge what I  gleaned from my recorded interviews.

General information:

A total of 40 respondents are interviewed. I split them based on locations of their garages: Dhaka North City Corporation and Dhaka South City Corporation. They age between 22-year old to 68-year old. They hail mostly from Mymensingh(10%), Gaibandha(10%), Bogra(10%), Sherpur(7.5%), Naogaon(7.5%), Kishorganj(7.5%), Barishal(5%), Chandpur(5%) and other districts. So respondents are scattered all across Bangladesh and no single district is dominating the pool of respondents.

Cultivable land:

Most of the respondents (64.10%) do not have any cultivable land. I have met rickshaw pullers who hinge on sharecropping to get part of their annual food stock. There are others who work as day laborers in village labor market. They split their time between Dhaka and villages, switching from Rickshaw pulling to sharecropping or selling labor. Only 15.83% of the respondents say they sell their labor in village labor market.


Daily earnings and costs:

Rickshaw pulling is a grueling task. Though in Dhaka, rickshaw pulling is becoming a lucrative job for informal laborers. I get wide range of responses about their daily earnings, varies between Tk 400 to Tk 1200. More than half of the respondents(57.50%) earn Tk500 per day. Tk 800 is earned by 15% of the respondents. I notice a battery-run rickshaw puller earns double than what a traditional rickshaw puller earns per day. One of the respondents is a battery-run rickshaw puller.

To take notice of price changes, I also calculated real earnings. I relied on GDP deflator to get a better measure of inflation adjusted earnings since GDP deflator comprises prices of all the goods and services in a country in a given period. The base year is here 2005-06 and I take the nominal GDP of 2017-18, as the data is available, to get the GDP deflator, which is 2.20.
In the given period, price level registered a 120% increase. For majority of the respondents, I find , the real daily earnings is Tk 227.27.

Respondents face a daily cost between Tk 250 to Tk 700. Most of the respondents (30%) face an out-of-pocket expense of Tk 300. 15% of the respondents incur a daily cost of Tk 270. 12.50% of the respondents count a daily cost of Tk320.

It appears that many respondents chose garages to spend their nights during their stint in Dhaka. They pay Tk 120 per day in this case.  And the price is inclusive of two-meal per day. They pay Tk 100 to garage owner for driving the rickshaw for a day. For snacks and other meals during their working hours, they encountered a range of costs, varying between Tk 60 to 100.

Daily real earnings & costs of rickshaw pullers

Both the daily real earnings and real cost are higher for rickshaw pullers reside in Dhaka South City Corporation. From slum census of 2014, we know that most of the slum dwellers from DSCC reside in slums erected on own property. Meanwhile, most of the slums in DNCC were built on government land. What changes took place in the slums of two city corporations are yet to be probed.

From the 40-respondent strong study of rickshaw pullers, I also try to  carry out a statistical analysis on the interaction between daily earnings and costs. Commonsense says that costs will respond positively to an increasing earnings. However, in the stat analysis, I find that F statistic gives a reading in that direction but the stubborn coefficient goes on the other way, trapping itself in confidence intervals. Pouring more observations could dispel the lack of evidence.


Savings:

While enquiring about their savings habits, I find and learn interesting things. Many respondents do not save at all. Those do save rest their trust on microcredit institution. They take loans from microcredit institutions at various points and start paying the credit the very day they take the loan. Savings amount is tied-in the credit. After completion of installment payments, microcredit institution retains the principal plus interest but gives back the savings to the borrower. This savings amount could then be reinvested or spent on family expenses.

Many of the respondents save by spending money on livestock. They buy a calf, rear it for some time and then sell it at a propitious time. Then they spend the money on family expenses, house renovation or land rent for sharecropping. This way of savings ---rearing livestock ---gives them some kind of trust as their "savings" grows right before their eyes, roams around them and is kept under their possession. No cheating, no deception.
They fear that evil quarter may swindle their money. Their fear has ground.

One rickshaw puller told me a heart breaking story. He opened a fixed deposit at a bank in Dhaka. For several years, he regularly deposited the money. Just before the maturity he came to learn that his deposit would mature two years later. The previous bank clerk did not keep any record of his first two years' savings. The poor fellow tried everything to convince the bank authority in vain. His two years' sweat money was swallowed by a swindler.

Besides microcredit institution (42.5%) and livestock(15%), insurance company (5%), self(5%) and relatives (5%) appear to be savings option for them. I encountered a rickshaw puller saves in an insurance company. Mobile financial services could also be considered as an option for savings. But none of the respondents said they opened the mobile banking account for savings only. Rather mobile banking account is extensively used to send money back home.

Loan:

Respondents take loan , which ranges from Tk 2000 to Tk 200000. However, a good number of them(33.33%) do not take any loan.
And those who take loan, most stick to the size of Tk 50,000(17.9%). Equal percentage of respondents (12.82%) take a loan of  size Tk 40,000 and Tk 30,000. The rest goes for various amounts of loan.

Respondents take loan mostly from microcredit institution (66.66%), relatives (5.56%) and neighborhood cooperative (5.56%). BRAC , Asha, Grameen, Shakti and Bureau Bangladesh appear to be the mentioned microcredit institutions.

Respondents put forward an array of reasons for taking loans, varies from daughter's wedding to cultivation and livestock. Daughter's wedding (8.57%), family expenses (8.57%) and sharecropping and land rent (8.57%) jointly top the list of reasons for taking loan. House purchase or renovation (5.71%), rickshaw purchase (5.71%) and livestock (5.71%) are other frequently mentioned reasons. In addition, reasons are attributed to children's education, natural disaster, cultivation, medical expenses and family dispute.

Contrary to my conviction,man made issues appear to be the principal causes for taking loan by rickshaw puller.

Money sent back home and the medium:

An overwhelming number of respondents prefer mobile banking services to send money back home. Apart from that, they also send the money by themselves or through relatives / acquaintances. Mobile financial services, it appears, play a crucial role in financial inclusion of lower income group by easing the financial transaction between sole bread winner and the rest of the family. At the same time, it reduces dependencies on traditional method that is opaque and that is difficult to keep record of financial transaction. Thus securing the interests of clients and insulating them from any wrong or fraudulent transaction.

Money sent back to village home ranges between Tk 2000 to Tk 15000 per month. Most of the respondents send Tk 10,000 per month(19.44%). Meanwhile, Tk 15,000 (13.89%) and Tk 5,000(13.89%) are other two frequently cited amount the respondents prefer to send back home.

Government allowance or social security program:

In sharp contrast to my belief, I find that only three of the respondents actually get government allowance or benefits from social security programs. One rickshaw puller gets few kilos of rice every month , another rickshaw puller's wife gets lactating mother's allowance and another one's father gets elderly allowance from the government. When I probe about ease of getting social allowance , they say they have to get along well with the local representatives and, in some cases, they pay part of the allowance as bribe to comply for such programs. In fact, many respondents lack this kind of privileges.

Concluding remarks:

My little study may not be representative, but I find that rickshaw pullers are extremely vulnerable to any volatility to their monthly and annual spending. Microcredit institutions are doing a tremendous job in empowering them and to get them l decent living. In addition, they also impart the habit of savings among rickshaw pullers. In terms of financial inclusion and improving the living standards of rickshaw pullers, microcredit institutions are leading from the front. I am appalled to learn that so few rickshaw pullers get social benefits. Government can widen its campaign to include the left out rickshaw pullers into social security programs. A good approach to that endeavor will be to make a database of rickshaw garages sprang up all across the Dhaka city. The database will have names of the rickshaw pullers and their native village addresses. Those who are out of social security programs could easily be included into the programs with the help of this database.Any cash or food aid will improve their livelihoods and leave a positive impact on their savings and economic activity.

Floating Woes Of Dhaka

Dhaka is heading for another mayoral election. Unlike other cities of Bangladesh, Dhaka is home of the largest floating people of the country. They throng here to look for jobs and to sustain families back in their native villages. Both the City Corporations mostly cater to the need of 15% or 20% of Dhaka population who have their own roof and a tiny section of whom , I assume, pay taxes to City Corporations.

Meanwhile, descamidos occupying numerous shanties across the city lack all basic amenities for a city dweller in spite of the fact that they also participate in economic activity to keep the wheel of urban economy moving. However, many of these village folks fall victim of intense exploitation as the city is infested with numerous thugs of all hues to swallow a part of the fruit of their hard labor. To insulate them from exploitation, to provide them a secure livelihood are no less important  task for City Corporations. Ignoring a decent place to stay and a decent work place for these fortune seekers could be proven too costly for both the City Corporations when it comes to the matter of making a livable Dhaka. Dhaka cannot become livable overnight by letting homeless people, the 85% of city dwellers, live a miserable life.

There will be no gainsaying that there is a slum dwelling population bulge in the last five years due to the lack of seasonal employment in rural areas, climatic conditions and urban pull factors. Numerous floating street markets and overwhelming number of rickshaws buttressed the evidence. Bangladesh's other major cities emulate the picture of rural-urban migration that can be found in Dhaka.

However, I am appalled to see that the floating people and their woes have never been made entry into the urban development programs of the two City Corporations.

Green=1997,Red=2014
Percentage of Slum Dwellers Live In Rented Accommodation.
(Source: Census of Slum 2014)

According to census of slums in 2014, 64.87% of slum dwellers live in rented houses whereas 48.45% of them lived in rented accommodation back in 1997. In Dhaka North City Corporation only 48.89% of the slum dwellers dependent on rented houses. In 2014, that percentage rose to 72.83%. Meanwhile, 87.42% of slum dwellers live in rented accommodation in Dhaka South City Corporation.

In the meantime, house rent indices  also increased. For Dhaka city, it was 4843.69 in 2013-14. In 2017-18, it stood at 6718.23.

 Despite the fact it took into account the private residential house across the country, rent in slum dwelling also goes up when utility fares and rent of private houses increase. So House Rent Indices could be seen as a measure of changes in prices of housing in slums also.

Base:1973-74=100
House Rent Indices (Source: BBS)

Certainly, for slum dwellers the rent of accommodation has also gone up. I have recently done a little survey  on rickshaw pullers about their daily earnings and expenses. I found that a rickshaw puller pays between Tk3000-5000 as house rent to reside in this city. That means a rickshaw puller has to pay between 25% and 41.67% of his monthly earnings on house rent.

The census of slums 2014 also tells that 61.4% of slum dwellers live in slums popped up in govt lands whereas 32.32% of slum dwellers live in slums erected on own lands in Dhaka North City Corporation. In contrast,  Dhaka South City Corporation offers a completely different picture. 74.94% of slum dwellers live in slums built on own land whereas 19.66% of slum dwellers live in slums constructed on government lands.

Vast portion of rent money ended into the pockets of people whose income may not contribute to national economy and wellbeing of the mass.

This is where City Corporations can step in and play a bigger role to assuage the housing problem of people perched on the lower ladder of income. City Corporations hold the authority to collect holding taxes, to set up bazars, to demolish illegal structures under its area and to issue rickshaw licenses.

So it is unbelievable that a certain quarter making huge bucks every month by setting up illegal facilities and exploiting the village folks while keeping the City Corporations in the dark.

The upcoming mayors can take cue from private sector housing initiative. Foreign investors with their local partners are unfolding accommodation packages for bachelors and students at an affordable price. Charitable organizations are also setting up affordable hostels for working women all across Bangladesh. These are examples that need to be replicated.

City Corporations can liaise with government and private organizations that have empty  lands scattered across the city to make good use of the lands , fending off the influence of bad quarters that collect unabated rents. City Corporations can then build arrays of housing facilitates, maybe makeshift, targeting the informal sector laborers, with the assistance from donors and other housing companies.

Benefits are two-pronged: cash-strapped City Corporations will have a steady stream of revenue and have a close tab on the informal sector labor force; for an informal worker, a significant reduction of housing expenses and a safe accommodation during his stint in the city.

Reducing the housing cost for lower income group has tremendous impact on improving their economic conditions. If a rickshaw puller's housing expenditures at Dhaka is lowered to 10% or 15% of his monthly earnings, then it will contribute to augment his monthly income. This retained / increased earnings will be spared for more income generating activities like rearing cows or share cropping.

Another group that will be benefitted from this initiative is the utility companies. As the City Corporations will take the onus of providing housing to lower income group, there will be a curb in system loss due to misuse of electricity, gas and water. City Corporations may offer these utilities or provide alternatives.


For various political reasons, previous city administrators overlooked this important group of the urban economy. It only pushed them towards the clutches of sharks and exploiters. New city administrators should spare no time to take notice of roles this group of workers plays in urban economy and take drastic steps to unpack an array of policies to address their housing woes.