The COVID-19 pandemic has generated an economic crisis for the garment industry due to lockdowns, order cancellations, and suspensions. In many manufacturing countries, garment workers have faced reduced or loss of income and worsened food security and health, suffering greatly from the subsequent consequences of the crisis.  

In July and August 2020, as part of the HERfinance program, with support from The Bill & Melinda Gates Foundation and the Levi Strauss Foundation, HERproject surveyed 700 workers (57 percent of whom were female), who received HERfinance training from Bangladesh, Egypt, and India, with the goal of understanding their financial behaviors during the crisis.  

Interviews suggest that female and male workers were more financially resilient following wage digitization and financial capability training. However, the systemic gender inequalities that have long affected women and girls were exacerbated during the pandemic.   

During the Pandemic, Access to and Usage of Payroll Accounts Made a Significant Difference for Workers 

Workers reported that they were able to be more financially resilient because they were paid into account, and had started saving before the COVID-19 pandemic started.  

“I was able to receive money remotely without my presence whereas others without account[s] had to physically approach or seek help from their friend to get their money transferred.”  - Reena, Peer Educator, India

Reena’s story was echoed by workers across the three surveyed countries, who took part in HERfinance training and were being paid digitally before COVID-19.  Access to financial products and services made a difference for them, as most could safely receive their wages during the lockdown. 

Beyond being paid digitally, workers who received financial capability training were able to benefit from using their accounts during lockdown. For workers with families living in rural villages, the ability to send remittances back home created financial stability in a time of uncertainty. In Bangladesh, 78 percent of female and 83 percent of male respondents reported they were able to send remittances via their mobile money accounts. In India, we also saw an increase of 28 percent in workers remitting from their digital wallets since the lockdown began. 

Learning about why and how to save also helped workers to cope with unexpected expenses such as health expenses, which dramatically increased during the pandemic.  

“Saving techniques helped me survive this COVID crisis. During COVID, I became very ill, needed a lot of money for my treatment, and can’t manage to convey medical expenses with my salary. From my past saving and had to owe a small amount, I was able to overcome the situation. These savings protected me from owing a large amount.” - Sujana, Female Garment Worker, Bangladesh

Social Norms Place Women in Marginalized Situations, Particularly in Times of Crisis 

Although digital wages provided a safety cushion for workers, it is important to realize COVID-19 disproportionately impacted women, which was reflected in the survey’s results. Additional work needs to be done, especially to address social norms that continue to hinder women's financial inclusion.

Adverse gender norms mean that women in Egypt, Bangladesh, and India are more likely to be financially excluded than men. Common gender barriers, such as access, technology use, and mobility, were exacerbated by the crisis. The World Bank’s Global Findex Database shows a considerable gender gap in financial account access across the three sampled countries: in Bangladesh, there was a 29 percentage point difference between women and men with financial accounts (36 percent vs. 65 percent); in Egypt, there was a 12 percentage point difference (27 percent vs. 39 percent); and in India, there was a 7 percentage point difference (76 percent vs. 83 percent).  

This difference can also be seen in our surveys, underlining increased challenges in accessing and using technology. In India, 27 percent of female workers reported using mobile wallets, compared to 92 percent of men. 65 percent of male workers said they paid their bills digitally, compared to 7 percent of female workers. Comparable results were reported in Egypt—although smart wallet access is low in general among garment workers, of those having access to one, 32 percent of men said they used it during the crisis, compared to only 7 percent of women.  

Social norms also continue to dictate women's access to their money, including handing over their account details to others to cash out their wages. In Egypt, 30 percent of female respondents reported that someone else went on their behalf to the ATM. A female worker in Egypt told us: “My fiancé [went to the ATM] because he refused to let me go out due to corona.” Likewise, in India, only 46 percent of women went to the ATM by themselves.  

Financial Capability Training Needs to Be Gender Transformative

Access to digital financial services, coupled with training that builds the confidence needed for women to use the services and addresses social norms around financial decision-making, can lead to increased economic empowerment and financial resilience for women. For example, in India, 67 percent of women and 77 percent of men who took part in HERfinance’s module on joint decision-making before the pandemic reported that they made financial decisions at home jointly during the crisis. These findings demonstrate the potential of HERfinance to encourage financial planning and decision-making that takes priorities of men and women into account.  

Garment workers, especially women, are extremely vulnerable to economic shocks. As stakeholders look to build resilience across their supply chains, they must also consider workers’ resilience, especially for low-income female workers. Building on the success of expanding financial inclusion for low-income workers, a comprehensive approach that allies financial capacity training and addresses women’s needs is necessary to build individual resilience in the face of the COVID-19 crisis and beyond. 

For more information and resources about wage digitization, please visit the HERfinance hub.