We recently hosted a virtual roundtable on the topic of financial inclusion in the supply chain. Funded by Citi Foundation and co-hosted by Microfinance Opportunities, a non-profit that focuses on financial education, the two-hour event provided participants with an opportunity to share case studies, ask questions, and discuss challenges on bringing formal savings and remittances, among other vital financial services, to low-income workers in the supply chain.
Four key messages came out loud and clear from the presentation and discussion that followed:
- Financial inclusion is relevant to companies across all sectors. With supply chains extending throughout the developing world, companies have access to billions of the world’s working poor who currently have no formal banking services. By implementing automated payroll, these workers can be brought into the banking system immediately at the time and place when they are paid. This not only increases the efficiency and accuracy of payroll but also reduces administration costs for factory managers.
- Learn from companies that are addressing this issue. Many companies, including Primark, Levi’s, and New Look, are currently addressing financial inclusion with their suppliers, and ongoing forums for dialogue and sharing best practices can speed up the learning and implementation process.
- Scalability and impact measurement are important. There is a need for stronger case studies on financial inclusion for workers in the supply chain that include specific metrics to measure benefits to workers as well as factory managers.
- Build on the existing HERproject model. A number of companies mentioned that the HERproject model—which uses a peer education methodology to provide health education to workers in factories—could be expanded to include financial education and access.
BSR will continue to explore ways to contribute to this important topic and encourage collaboration from companies, their suppliers, and meaningful partners.
How do you think companies can help bring access to finance to the world’s working poor?