In Cambodia, where only 33% of adults have a bank account (World Bank Global Findex 2021) and 85% of garment workers are women, many garment sector wages continue to be paid in cash. To better understand the opportunity for wage digitization in Cambodia, IFC partnered with BSR’s HERproject, under the IFC/ILO Better Work partnership, and in collaboration with Microfinance Opportunities. We studied the opportunities and challenges to digitize Cambodia’s garment factory wages through interviews and surveys with over 400 workers and managers from more than 100 factories. Half of the factories we selected to interview pay workers digitally and the other half pay workers in cash.
The research showed that wage digitization has benefits for employers—factories who pay wages digitally find it to be more cost-effective than cash, even after accounting for the start-up expenses to set up the digital system. However the benefits for workers have not yet been realized as they still need cash for most of their financial transactions. The financial infrastructure surrounding Cambodia’s garment sector is ripe for digitization, with smartphones and payroll products being readily accessible, so with the right support workers have the potential to benefit from making digital payments. Overall, the findings suggest that stakeholders have shared interests, which will create opportunities to expand the use of digital wages in Cambodia’s garment industry, with the potential to increase financial inclusion for women.