Nigeria, Africa’s biggest economy can take lessons from other developing economies such as Bangladesh whose wage digitisation model is putting millions of unbanked women into the financial net, thereby increasing the country’s financial inclusion rate.
According to the latest Global Findex report by the World Bank, the percentage of Bangladeshi women with bank accounts rose to 43.5 in 2021 from 35.8 percent in 2017, while for men; it declined to 62.9 percent from 64.6 percent.
The percentage of Nigerian women with bank accounts also rose to 35 percent in 2021 from 27.3 percent but it is lower than the 56 percent of Nigerian men who have bank accounts.
“As a program officer at the Gates Foundation, I work with partners such as HERProject to encourage financial inclusion in Bangladesh, where wage digitization has made impressive strides towards bringing women under the formal financial umbrella,” Snigdha Ali, program officer, financial services for the poor, Bill & Melinda Gates Foundation said in a recent article.
She said women’s digital account ownership in Bangladesh increased by seven over the past four years, cutting one of the world’s largest financial gender gaps by a third.
“One big reason for this gain is a push for digital wages in Bangladesh’s Ready-Made Garment (RMG) industry, leading to exponential growth in such payments after the government’s COVID-19 response drew on the nation’s vibrant ecosystem of mobile money companies to better reach workers who did not yet have bank accounts,” she added.
Before the COVID-19 pandemic in 2020, the Government of Bangladesh and private-sector leaders pledged to work together to introduce digital wage payments in the RMG industry. But the pandemic fast tracked the pledge as the lockdown measures to curb the spread of the virus closed factories, leaving millions of workers without jobs, money, or food.
“To ease this crisis, the government offered low-interest loans so garment manufacturers could pay their workers for three months while factories were closed, with one key stipulation,” Ali said.
A recent report by HERProject, a multi-stakeholder collaborative initiative, said Bangladesh has recognized the importance of digitizing wage payments in the garment sector, its largest export industry, and has the opportunity to become a leader in transparent and innovative labour practices.
“More than half of Bangladesh’s four million garment workers are women. And because they are mostly young, less able to access education, and unbanked, the economic potential of this pool of 2.3 million workers has not traditionally been recognized by Financial Service Providers and the government,” it said.
It said digital wage payments have begun to change this, and impact data shows that women workers are active and integral to the economy. “Of the 85,123 women who participated in the HERproject Digital Wages Program across 64 factories, one in two opened a mobile money account and one in five started saving regularly.”
The report added that the women conducted an average of eight transactions a month, including sending person-to-person remittances and buying airtime for their phones.