Wage payment to be digitised for RMG workers by 2021

Staff Correspondent

21 November, 2019 12:00 AM printer

At least 90 per cent workers of the ready-made garment (RMG) sector will receive their wages through digital payment systems by 2021.

The disclosure was made at the ‘Bangladesh Digital Wages Summit’ held at Radisson Blue Hotel in the city.

Out of around 4.1 million garment workers in Bangladesh, roughly 1.5 million are currently getting their wages through digital payment systems.

The summit was jointly organised by the Access to Information (a2i) Programme of the ICT Division, supported by the Cabinet Division, United Nations Development Programme (UNDP) and the United Nations-based Better Than Cash Alliance.

The summit was co-organized by Business for Social Responsibility (BSR) and Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

The summit also discussed issues faced in making cash payments for both the garment employees and manufacturers and how digital payments are beneficial for both parties, in terms of security, efficiency, empowerment and independence.

Addressing a panel discussion titled “Scaling digital wages for employees and manufacturers” at the summit, Industries Minister Nurul Majid Mahmud Humayun, MP said: “We are committed to supporting the ready-made-garments sector to leverage new technologies that will improve the lives of garment workers. These efforts will, in turn, improve our country’s economic growth.”

 Key panelists included State Minister for ICT Division Zunaid Ahmed Palak, MP; Bangladesh Bank Deputy Governor Ahmed Jamal; Managing Director of the United Nations-based Better Than Cash Alliance Dr. Ruth Goodwin-Groen; ILO Country Director and UN Representative Tuomo Poutiainen; Resident Representative of UNDP Sudipto Mukerjee; BGMEA President Dr. Rubana Huq and Marks & Spencer Country Manager Shwapna Bhowmick. The panel discussion was moderated by a2i Policy Advisor Anir Chowdhury.

Digital payment system is an important channel through which the government is bringing the garment employees into the formal sector and allow them to access digital services and pay for it, while helping them transition, the minister added.

ICT State Minister Zunaid Ahmed Palak said Bangladesh has specific targets of 2021 to become a middle-income country, 2024 for graduating from least developed countries (LDCs), 2030 for achieving the sustainable development goals (SDGs) and 2041 for a developed country.

For achieving all of the goals, he said, Bangladesh will have to empower women as they are half of the total population.

“Moreover, 80 per cent of our RMG workers are women. Without ensuring financial empowerment, we cannot ensure the women empowerment,” he added.

The state minister also said the government is supporting innovative solutions to digitize payroll in order to empower garment workers, particularly women.

BB Deputy Governor Ahmed Jamal said the central bank has been striving to cut costs and improve access to digital financial services through building an enabling environment.

Better Than Cash Alliance chief Dr. Ruth Goodwin-Groen said, “We are committing to help bring together the key public and private sector stakeholders who can take wage digitization in Bangladesh to the next level.”

BGMEA president Dr. Rubana Huq said through digitizing wages, the employers association seek to further promote financial benefits, such as cashback, reward points and merchant discounts, to increase the value of wages for the garment workers.

Marks & Spencer Country Manager Shwapna Bhowmick said their brand will continue to contribute to the digital wages working group and will share the experiences of leading suppliers who have already digitized wages.

Shifting to digital payments benefits both employers and employees while promoting stronger business relationships. When payroll got digitized, garment factories recorded a 53 per cent savings in staff time for their admin and finance teams. Wage digitization also improved the likelihood of women to participate in household decisions related to spending and savings by 15 per cent.

Three different panel discussions were organized at the summit. The first discussion, “Benefits of digitizing responsibly: The business case and impact on women workers” was moderated by Bangladesh Representative for HER Project at BSR Smita Nilimita.