RMG sector shifts to digital wage payments

Massive shift to digital wages payment in Bangladesh’s Ready Made garments (RMG) sector is experienced during the recent time, said a survey report.  

The survey was conducted on May 15 and 16, 2020 by researchers working for a local research institute in Bangladesh, South Asian Network on Economic Modeling (SANEM), and a U.S.-based NGO, Microfinance Opportunities (MFO). 

The researchers surveyed 1,384 workers in the RMG sector in Bangladesh by telephone. The workers and the researchers had previously participated in theGarment Worker Diaries study, which collected data from 1,300 workers throughout 2019 and until the end of January 2020. 

The workers are employed in factories spread across the five main industrial areas of Bangladesh (Chittagong, Dhaka City, Gazipur, Narayanganj, and Savar). Almost three-quarters are women. Though the sample over-represents women, it can be considered to be roughly representative of workers in the sector as a whole.

The major findings of the survey are include; as of May 16, 67% of workers reported they had been paid. There are some differences in the experiences of men and women workers during the May payment cycle. Fewer women report being paid: 64% of women reported being paid and 74% of men reported being paid.  

82% of workers, who were paid, reported that they were paid through some sort of digital channel (bKash, Rocket, Nagad, or bank transfer). In comparison, in April, 28% of garment workers were paid digitally. This represents a massive shift of payments from cash to digital within the space of one month. Both women and men reported being paid digitally at about the same rate—82% and 84% respectively

Women were less likely to have withdrawn the cash from their accounts immediately after they had been paid—84% of women reported withdrawing their salary from their account immediately in comparison to 93% of men. 

Despite the large number of workers being paid digitally, many for the first time, the process went smoothly for most of them: 95% were able to cash out their payment at an ATM or agent on their first try and 78% waited in line to cash out for less than 10 minutes.