DHAKA, June 25, 2019 (BSS) – The International Finance Corporation (IFC), a member of the World Bank Group, organized an event today to establish the business case for digital wage payments using mobile financial services in the readymade garment (RMG) sector and launched a series of resources to enable garment factories to shift from cash to mobile-based wage payments for their workers.
Specialized tools will allow mobile financial service providers to expand the range of digital payments for garment workers and ensure that the RMG sector can take the initiative forward, said a press release.
It is part of IFC’s and Bangladesh Bank’s joint initiative to include women financially through Mobile Financial Service (MFS) adoption.
According to the press release, there is a stark gender gap in access to financial services in Bangladesh, where only 36 percent of women have a formal bank account, compared to 65 percent of men. Given the economic significance of the readymade garment sector, which is dominated by female workers, digitizing wage payments through MFS can have a significant impact on women’s financial inclusion.
When garment workers open MFS accounts to receive their salaries, they can avail a broad range of financial services. However, about 90 percent of factories pay their workers in cash, which is a missed opportunity for both the financial and RMG sectors.
IFC Country Senior Country Officer Nuzhat Anwar and Deputy General Manager of the Bangladesh Bank Masuma Sultana, among others, were present at the event. Nuzhat Anwar said IFC is proud to engage with the private sector and leverage their international expertise in improving women’s access to financial services.
This engagement demonstrates how their approach can benefit all stakeholders in the garment sector’s ecosystem, she added.
Through IFC’s initiative, over 70,000 female workers benefitted from digital wage payments to their mobile financial services accounts between 2016 and 2018, and they can now use their accounts to send money, build savings and make payments securely.
Masuma Sultana said Bangladesh Bank has worked tirelessly to ensure that the financial sector expands inclusively to reach underserved segments, such as women.
IFC has been a long-standing partner in supporting Bangladesh to achieve this goal, and the efforts to financially empower female garment workers is commendable, she added.
In today’s event, leaders of the RMG sector and international retail brands participated in a panel discussion to highlight the lessons learned from existing wage digitization efforts and how they can contribute to improve the transparency and efficiency of the broader apparel value chain.