Boosting access to, and usage of, mobile wallets in the garment worker sector can accelerate the growing trend of wage digitization and aid women’s financial inclusion, according to a roundtable event hosted by Women’s World Banking, a global authority on financial inclusion for low income women in developing economies.
Overall financial inclusion in Bangladesh has increased to 50 percent of the population, while mobile wallet usage has jumped from 3 to 21 percent (source: Global Findex). However, growth for women users has not seen the same upward trajectory, and the gender gap for access to financial services has grown from nearly 9 percent to nearly 30 percent. Men are twice as likely as women to own a mobile phone.Wage digitization is part of the Bangladesh government’s push for a cashless society and could help millions of garment workers, many of whom are women, become financially included. Wage digitization also offers opportunities for factory owners to drive efficiencies in their payroll systems. However, despite the advantages of paying and receiving wages digitally, barriers to usage still exist. Women face issues like low access to mobile technology, lack of digital and financial literacy, and a low level of trust and familiarity with digital payments. Further, once the wallet is funded, teaching the worker to transact digitally rather than “cashing out” is a challenge.
“Wage digitization is an on-ramp to offering a broader range of financial services to low income women and, in doing so, enables them to attain more financial stability, meet their, and their family’s day-to-day needs and better prepare for the future,” says Diana Gooley, manager, Digital Financial Services at Women’s World Banking.
To explore the opportunities and challenges of digital wage distribution, Women’s World Banking and Dutch-Bangla Bank (DBBL) partnered to explore boosting garment workers wallet usage through DBBL’s mobile wallet product Rocket. The project found the main obstacle to usage were digital literacy and understanding of the benefits of mobile financial services. They found that using brand promoters and peer ambassadors in the factories to teach workers how to use wallets were effective ways to overcome the digital literacy and product familiarity issues.
“We think that wage digitization has tremendous potential to give millions of low income women efficient financial services. Wages go straight to their mobile wallets, and they are then able to remit more effectively, and at a lower cost, and carry out other transactions more conveniently and securely,” continues Gooley. “For factory owners, digitization reduces cash handling costs and leakage or loss, reduces expenses managing cash distribution, and can eliminate time lost as workers queue for cash on payday, which could also lead to having a more satisfied and productive workforce. These seemingly small efficiencies all add up and can create real impact for both employer and employee.”