Women in this industry take on demanding roles to sustain their families today and lay the groundwork for a secure tomorrow. However, many are paid cash wages and lack access to financial services, limiting their ability to save and increasing their risk of theft. Often, they have less control over their earnings, frequently handing over some or all of their income to a family member.

For employers, cash wages are inefficient due to the time-consuming processes of counting and distribution. Additionally, transporting and holding cash on premises expose them to theft. Responsible wage digitisation, combined with gender-responsive financial capability training, holds the potential to address these challenges and contribute to social and economic progress. For millions of garment workers, it promises transparency in pay, access to formal financial accounts, a secure place to save, and, with the right support, increased economic agency and empowerment. Moreover, there is an opportunity to move beyond financial inclusion to improve financial health with programmes and products that help garment workers better manage daily expenses, handle emergencies, stay on track to reach future goals, and feel confident and in control of their money, as per the research.

Investing in women's financial health can have a multiplier effect. Research has shown that when women have greater control over household finances, they tend to invest in essential needs, leading to better outcomes for families and communities. For businesses, wage digitisation can enhance efficiency, demonstrate wage compliance in factories, create new market segments for financial service providers, and contribute to broader economic stability and growth. This shift can help countries achieve the UN's Sustainable Development Goals, fostering a more inclusive and resilient economy.

Transitioning from cash to digital wages has shown positive outcomes when implemented with a gender-intentional approach, with both women and men garment workers reporting improved financial health and wellbeing. RISE Financial Health training strengthened participants' financial knowledge and skills, built their trust in financial services, and increased their control over household financial decisions. This enabled them to make more informed choices about how wages are spent and saved and helped them build more secure futures for themselves and their families.

In Cambodia, at the end of the programme, 99 per cent of women surveyed were paid into accounts, a 62 percentage point increase, and 84 per cent of women reported saving regularly, a 38 percentage point rise, linked to having a safe place to keep their savings. This led to 80 per cent of women reporting confidence in their ability to manage a financial emergency within the next two years, up 25 percentage points. In Egypt, 73 per cent of women workers reported that having a bank account helped them during the COVID-19 crisis because it allowed them to manage their wages more easily. In Bangladesh, there was a 19 percentage point increase in the share of women reporting more involvement in household decision-making on how to use their earnings, now discussing how to use their earnings with family members.

Wage digitisation also yielded significant payroll and production savings. Factories reported a reduction in the time spent processing, counting, disbursing, and auditing payroll: 42 per cent in Egypt, 59 per cent in Bangladesh, and 84 per cent in Cambodia, where there are two paydays a month. With the right support, workers also became active users of financial products and services, creating an active new market segment for financial service providers. For example, in Bangladesh, following participation in RISE Financial Health, workers conducted 8-13 transactions a month, including airtime top-up and sending remittances.

The paper outlines concrete opportunities for financial health practitioners and policymakers to collaborate with the private sector to create impact at scale with wage digitalisation.

Fibre2Fashion News Desk (DP)