Bank accounts for workers
Since 2010, Primark has been working with its suppliers across India and Geosansar to help hundreds of workers open bank accounts. With bank accounts, workers are able to save money and become more financially stable.
Many workers in garment factories don't have bank accounts and are paid in cash. This makes it hard for them to save and manage their money safely. Without savings, they are unable to cope with unforeseen circumstances such as medical emergencies. This means they may have to turn to ‘loan sharks’ for credit, ending up in a cycle of increasing debt and likelihood of poverty.
Primark has teamed up with Geosansar to provide bank accounts for garment workers in factories that make our products.
What are the benefits for workers?
- Workers are able to save money in their bank accounts, and so when unforeseen emergencies or costs do occur, they’re able to cope with this using their savings, rather than borrowing money from loan sharks at high interest rates, or their friends and family.
- Workers earn a health rate of interest on their savings.
- To access their account, workers use their local Geosansar branch, typically a small, friendly kiosk located near the factory or in the community they live in. The kiosks are open six days a week, and evenings, meaning workers and their families can access them at times convenient to them.
- For many workers, saving money in a bank account is new, and therefore the Geosansar team is trained to provide financial education, encouraging workers to save money and highlighting the long-term benefits.
- Workers are issued with a bank identity card and a letter from the State Bank of India. This is official and useful identification which can be used for other purposes.
- Workers have access to a range of other relevant products such as health and life insurance, pensions, and money transfers.
- Geosansar uses state of the art biometric finger scanning devices, providing a safe and secure system that doesn’t rely on documentation. This system is important for people who may have low literacy levels.
- For many women, their Geosansar bank account allows them to be financially independent for the first time. Studies show that when women are in charge of the family budget, they are more likely to invest in the education and health of their children.
The results of this ground-breaking programme are changing factory workers’ lives, in a small but significant way.
“I found it is an opportunity for me to save some money for my future. Earlier, once I received my salary in hand I needed to go to the bank to make a safety deposit, but now my salary is directly deposited into my account and I can withdraw whatever amount I need from time to time. It’s excellent for me. I came across lots of incidents on the TV and in the newspaper about ATM card fraud. But I don’t have to worry about that with this card. It’s really very nice. Thanks to Geosansar”. Ms R Preethi
“Now I also can save some money for my children” Mrs PA Subalaja
“It’s very beneficial for me, it’s an opportunity to save, and delivers my salary to my doorstep. And it’s a very good safe method of fingerprint capturing and identification.” Mr A Senthilkumar.
“It’s simple, easy and fast. There are no documents required. It’s extremely good, as even someone who doesn’t read and write can have a bank account and do their transactions using their fingerprints. I am really proud to have an account”. Mr Manikumar.
"I come from Gobi which is 60 kilometres away from Tirupur, and I don’t have time to go to any of the banks. It’s simply very useful for me." Mr Haridass.
"Now I’m using this account for my salary but I want the same services in my home town also so that I could save some money in it and withdraw it whenever I need to." Mrs Poongothai.
"I am so happy that even I also can have a bank account nowadays. I feel proud”. Mrs Banumathi
Why is financial inclusion important?
Why is financial inclusion important? It is important simply because it is a necessary condition for generating and sustaining equitable growth. History has shown that it is virtually impossible to transition an economy into a modern society without broad-based financial inclusion. How could you survive in today’s modern world without your bank account, credit or debit card, access to insurance, loans etc?
Helping to provide opportunities to those at the ‘Bottom of the Pyramid¹’ to grow out of poverty, without providing a mechanism by which they can sustain that growth for generations is akin to using a band-aid for today and ignoring our future responsibilities. Banking and financial services access, at an affordable cost is a critical tool for those at the bottom as it provides the opportunity to build savings (however small they may be); make investments and securely grow their limited investments for the future of their children. In addition, products such as insurance, pensions and secure remittances helps reduce the risk of their daily lives and allows them to build some protection against the income shocks (caused by illness, death in the family or loss of employment, etc). Without such access these shocks could be fatal.
Geosansar has been established in India to provide financial education and develop financial literacy amongst those at the bottom of the pyramid. We work closely with global brands such as Primark to create an environment of financial inclusion alongside their operations. We believe that this will create a long term sustainable model generating growth in the local community while providing a platform through which that growth could be sustained for the future generations. In short, in the creation of a social enterprise.
¹: ‘Bottom of the Pyramid’ was the title of C K Prahalad's famous book published in 2004 which focused on reengineering of the supply chain to deliver products and services to the population that is currently unserved. “New and creative approaches are needed to convert poverty into an opportunity for all concerned. That is the challenge.” CK Prahalad was an inspiration to the creation of Geosansar.