Mastercard: Wage Digitalization: A Path to Accelerating Financial Health for Garment Workers
Mastercard (MA) is partnering with RISE to promote wage digitalization in the garment sector, aiming to improve financial health for workers, particularly women. The initiative has shown positive outcomes in Cambodia, Egypt, and Bangladesh, with increased account ownership, savings rates, and financial confidence among workers. Key benefits include:
- Improved financial management and decision-making for workers
- Increased efficiency and compliance for employers
- Creation of new market segments for financial service providers
- Contribution to broader economic stability and growth
The Mastercard Center for Inclusive Growth has become the anchor partner for RISE's Financial Health focus area, with plans to expand to Indonesia and Guatemala in 2024. The collaboration aims to drive global change through partnerships across sectors, focusing on improving financial health and building more inclusive economies.
Mastercard (MA) sta collaborando con RISE per promuovere la dizzazione digitale dei salari nel settore dell'abbigliamento, con l'obiettivo di migliorare la salute finanziaria per i lavoratori, in particolare per le donne. L'iniziativa ha mostrato risultati positivi in Cambogia, Egitto e Bangladesh, con un aumento della proprietà dei conti, dei tassi di risparmio e della fiducia finanziaria tra i lavoratori. I principali benefici includono:
- Miglioramento della gestione finanziaria e del processo decisionale per i lavoratori
- Maggiore efficienza e conformità per i datori di lavoro
- Creazione di nuovi segmenti di mercato per i fornitori di servizi finanziari
- Contributo alla stabilità e alla crescita economica più ampia
Il Mastercard Center for Inclusive Growth è diventato il partner principale per l'area di focus sulla Salute Finanziaria di RISE, con piani di espansione in Indonesia e Guatemala nel 2024. La collaborazione mira a promuovere cambiamenti globali attraverso alleanze tra settori, concentrandosi sul miglioramento della salute finanziaria e sulla costruzione di economie più inclusive.
Mastercard (MA) se está asociando con RISE para promover la digiitalización de salarios en el sector de la confección, con el objetivo de mejorar la salud financiera de los trabajadores, especialmente de las mujeres. La iniciativa ha mostrado resultados positivos en Camboya, Egipto y Bangladés, incluyendo un aumento en la propiedad de cuentas, las tasas de ahorro y la confianza financiera entre los trabajadores. Los beneficios clave incluyen:
- Mejora en la gestión financiera y la toma de decisiones para los trabajadores
- Mayor eficiencia y cumplimiento para los empleadores
- Creación de nuevos segmentos de mercado para los proveedores de servicios financieros
- Contribución a una estabilidad y crecimiento económico más amplios
El Mastercard Center for Inclusive Growth se ha convertido en el socio ancla del área de enfoque de Salud Financiera de RISE, con planes de expansión a Indonesia y Guatemala en 2024. La colaboración busca impulsar un cambio global a través de asociaciones en todos los sectores, centrándose en mejorar la salud financiera y construir economías más inclusivas.
마스터카드(MA)는 의류 산업에서 임금 디지털화를 촉진하기 위해 RISE와 협력하고 있으며, 특히 여성 근로자들의 재정 건강을 개선하는 것을 목표로 하고 있습니다. 이 이니셔티브는 캄보디아, 이집트 및 방글라데시에서 긍정적인 결과를 보여 주었으며, 근로자들의 계좌 소유, 저축률 및 재정적 자신감이 증가했습니다. 주요 이점은 다음과 같습니다:
- 근로자를 위한 재정 관리 및 의사결정 개선
- 고용주를 위한 효율성 및 규정 준수 증가
- 금융 서비스 제공자를 위한 새로운 시장 세그먼트 창출
- 보다 광범위한 경제 안정성과 성장에 기여
마스터카드 포용 성장 센터는 RISE의 재정 건강 분야의 주요 파트너가 되었으며, 2024년까지 인도네시아와 과테말라로 확장을 계획하고 있습니다. 이 협업은 세 가지 분야에서 파트너십을 통해 글로벌 변화를 이끌어내고, 재정 건강을 개선하고 보다 포용적인 경제를 구축하는 데 초점을 맞추고 있습니다.
Mastercard (MA) s'associe à RISE pour promouvoir la dématérialisation des salaires dans le secteur de l'habillement, visant à améliorer la santé financière des travailleurs, en particulier des femmes. L'initiative a montré des résultats positifs dans au Cambodge, en Égypte et au Bangladesh, avec une augmentation de la propriété des comptes, des taux d'épargne et de la confiance financière parmi les travailleurs. Les principaux avantages incluent :
- Meilleure gestion financière et prise de décision pour les travailleurs
- Efficacité accrue et conformité pour les employeurs
- Création de nouveaux segments de marché pour les fournisseurs de services financiers
- Contribution à une plus grande stabilité et croissance économique
Le Centre Mastercard pour une Croissance Inclusive est devenu le partenaire principal pour l'axe Santé Financière de RISE, avec des projets d'expansion vers l'Indonésie et le Guatemala en 2024. La collaboration vise à entraîner un changement mondial par le biais de partenariats intersectoriels, en se concentrant sur l'amélioration de la santé financière et la construction d'économies plus inclusives.
Mastercard (MA) arbeitet mit RISE zusammen, um die Digitalisierung von Löhnen im Bekleidungssektor voranzutreiben, mit dem Ziel, die finanzielle Gesundheit der Arbeiter, insbesondere der Frauen, zu verbessern. Die Initiative hat in Kambodscha, Ägypten und Bangladesch positive Ergebnisse gezeigt, mit einem Anstieg der Kontobesitz, der Sparquoten und des finanziellen Vertrauens unter den Arbeitern. Zu den wichtigsten Vorteilen gehören:
- Verbesserung des Finanzmanagements und der Entscheidungsfindung für die Arbeiter
- Erhöhte Effizienz und Compliance für die Arbeitgeber
- Schaffung neuer Marktsegmente für Finanzdienstleister
- Beitrag zu einer breiteren wirtschaftlichen Stabilität und Wachstum
Das Mastercard Center for Inclusive Growth ist der Hauptpartner für den Bereich Finanzgesundheit von RISE geworden, mit Plänen, 2024 nach Indonesien und Guatemala zu expandieren. Die Zusammenarbeit hat zum Ziel, durch Partnerschaften in verschiedenen Sektoren globalen Wandel voranzutreiben, wobei der Fokus auf der Verbesserung der finanziellen Gesundheit und dem Aufbau integrativerer Volkswirtschaften liegt.
- Increased account ownership among women workers (62% increase in Cambodia)
- Improved savings rates (84% of women in Cambodia reported saving regularly, up 38%)
- Enhanced financial confidence (80% of women in Cambodia confident in managing financial emergencies)
- Significant payroll processing time reduction for factories (42% in Egypt, 59% in Bangladesh, 84% in Cambodia)
- Creation of new market segment for financial service providers (8-13 transactions per month per worker in Bangladesh)
- Expansion of the program to Indonesia and Guatemala in 2024
- None.
Insights
The digitalization of wages in the garment sector offers significant improvements in terms of operational efficiencies and financial health for workers. For employers, the transition from cash to digital payments reduces time spent on payroll processing, which was highlighted by reductions in processing times of 42% in Egypt, 59% in Bangladesh and 84% in Cambodia. These savings can translate into better profit margins and reduced operational risks associated with handling cash.
For the workers, especially women, having direct access to their wages via digital accounts fosters greater financial independence and security. The increase in regular savings and improved confidence in managing financial emergencies is particularly noteworthy. From a broader perspective, the digitalization process opens up new market segments for financial service providers, as evidenced by the rise in transactional activity among workers in Bangladesh. Overall, this move aligns with global trends towards fintech adoption and can enhance economic stability and growth in developing regions.
This initiative by Mastercard taps into an underserved market, providing financial inclusion for millions of garment workers, primarily women. The program addresses a critical issue of financial literacy and access, significantly impacting personal financial management. The reported outcomes from countries like Cambodia, Egypt and Bangladesh indicate a substantial improvement in women's ability to save, control over their finances and resilience during emergencies.
Furthermore, this initiative is poised to create a positive feedback loop: as workers gain more financial stability, their spending power and economic participation increase, which can drive broader market growth. The expansion into new markets such as Indonesia and Guatemala in 2024 suggests Mastercard's strategic intent to scale this model, potentially leading to substantial market share gains in these regions. By positioning itself as a leader in wage digitalization, Mastercard strengthens its brand and creates long-term value in emerging markets.
Wage digitalization, particularly with a gender-responsive approach, has far-reaching social implications. By ensuring that women have direct access to their earnings, this initiative empowers them economically and improves their household decision-making roles. The correlation between women’s financial control and improved family well-being is well-documented. The data from Cambodia, where 84% of women now save regularly and 80% feel confident in handling financial emergencies, underscores the transformative potential of such programs.
Additionally, the initiative supports broader socioeconomic goals such as the UN's Sustainable Development Goals (SDGs). Increased financial inclusion can lead to more stable and resilient communities, as households with better financial health are more likely to invest in education, healthcare and nutrition. This cascading effect can drive sustained socioeconomic development, reducing inequality and fostering inclusive growth.
NORTHAMPTON, MA / ACCESSWIRE / July 22, 2024 / Mastercard
Mastercard
By Payal Dalal and Christine Svarer
Across the garment sector, women take on demanding roles with a dual purpose: 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 putting them at risk for theft. They often 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 because counting and distribution are time-consuming processes. Transportation and holding cash on premises expose them to a risk of theft.
Responsible wage digitalization, along 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. There is also an opportunity to move beyond financial inclusion to improve financial health with programs and products that enable garment workers to better manage daily expenses, handle emergencies, stay on track to reach future goals, and feel confident and in control of their money.
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 like food security, health and education, leading to better outcomes for families and communities. For businesses, wage digitalization can enhance efficiency and demonstrate wage compliance in factories, create new market segments for financial service providers, and contribute to broader economic stability and growth. This shift can progress countries toward achieving the UN's Sustainable Development Goals, fostering a more inclusive and resilient economy.
[Following wage digitization], I know when my salary is coming in. I can pay utility bills, I can easily transfer money to my parents, I can make a loan payment through my account, and I can withdraw and deposit cash whenever I want.
Vorn
Garment worker in Cambodia
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. As a result:
In Cambodia, at the end of the program,
99% of women surveyed were paid into accounts (up62% -points) and84% of women reported saving regularly (up38% -points), linked to having a safe place to keep their savings. This led to80% of women reporting confidence in their ability to manage a financial emergency within the next two years (up25% -points).In Egypt,
73% 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% -point increase in the share of women reporting more involvement in household decision-making on how to use their earnings. They now discuss how to use their earning with family members.
Wage digitalization also yielded significant payroll and production savings. Factories reported a reduction in the time spent processing, counting, disbursing and auditing payroll:
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.
In our new working paper ‘Improving financial health and well-being in global supply chains through wage digitalization', we share insights on how responsible wage digitization, including financial capability training for workers, leads to improvements in financial health. We also outline concrete opportunities for financial health practitioners and policymakers to collaborate with the private sector to create impact at scale with wage digitalization.
Partnerships will be crucial in this effort, which is why the Mastercard Center for Inclusive Growth has become the anchor partner for RISE's Financial Health focus area, doubling down on its support for women workers in global garment supply chains.
Together, we will seek to replicate and expand the benefits of responsible wage digitalization to reach more women workers and improve their financial health, including expanding the program to two new markets in 2024, Indonesia and Guatemala, and will continue to share learnings and insights with key stakeholders including financial health practitioners and policymakers.
We recognize that we cannot tackle the complex challenge of expanding global financial health and well-being alone. Collaboration across sectors is essential. The garment industry, with its large women workforce, and the financial services industry, with a foothold in the digital economy, are important partners for policymakers and practitioners to drive global change. Working together, we can accelerate progress and create lasting impact for workers and their families and build more inclusive and resilient economies.
Payal Dalal is executive vice president, global programs, Mastercard Center for Inclusive Growth, and Christine Svarer is executive director, RISE (Reimagining Industry to Support Equality).
Feature photo credit: RISECDS - M.Moawad
Originally published by Mastercard
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SOURCE: Mastercard
View the original press release on accesswire.com
FAQ
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