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The economic condition of coastal communities in Bangladesh is adversely affected by the freshwater crisis arising from salinity intrusion in ground and surface water. Even though the country receives 2400mm (average) rainfall per year, the use of rainwater is undermined by the water governance system and by the increasing dependence on contaminated groundwater. Based on this argument, this paper explores how can rainwater be used to reduce the freshwater crisis problem in coastal Bangladesh? This paper focuses on the climate-induced water poverty approach based on fieldwork experiences in Chilla, coastal Bangladesh. The findings indicate that the majority of the population living in Chilla, like many other coastal communities, has been facing severe freshwater poverty which, in turn, makes them economically poorer. It also argues that the promotion of a Rainwater Harvesting System (RHS) alongside a strong governmental financial and technical assistance can reduce water and economic poverty.