Paper

Digitizing for Inclusion

Insights from wage digitization in the garment sector

As the transition from cash to digital financial services accelerates around the world, greater understanding is developing on how to manage this shift, what is needed to deliver impact, and the importance of increased collaboration across private and public sectors.

Since 2018, BSR’s HERproject has partnered with the Mastercard Center for Inclusive Growth to leverage the HERfinance Digital Wages program to scale up wage digitization for ready-made garment factories and workers in Bangladesh, Egypt, and Cambodia. The program focuses on implementing workplace training, especially tailored to women, and has included the development of specialized technology training tools to help factory managers and workers effectively transition to—and use—digital financial services.

Due to the severe disruption resulting from COVID-19, the garment sector is currently in a precarious position with continued uncertainty for workers, many of whom have lost their jobs. Although the pandemic forced many factories to suspend their production, it has also emphasized the need for the industry as a whole to move away from a predominantly cash-based system. While the broader concern about the future of the garment sector and the security of jobs remains, digital wages have played a critical role in ensuring that workers were paid in the short-term.

Many lessons have been learned over the past few months.  The pandemic has made it clear that it is time to scale up the use of digital financial services, not only because they are more efficient and effective than cash, but—perhaps even more importantly—because of the role that digitization plays in advancing greater financial inclusion and security, particularly for vulnerable populations. In fact, as lockdowns brought much of the world to a standstill, governments and the private sector alike turned to digital financial services to make rapid payments at scale.

This report shares five lessons and insights from the Digital Wages program that can be valuable to everyone working collectively to scale digital financial services across multiple use cases, including wages and government payments.