Innovative Finance to Address Bonded Labor in Supply Chains

June 23, 2020

The Working Capital Fund seeks to scale innovative approaches that solve longstanding problems of labor exploitation in supply chains. One of the most persistent and egregious causes of labor exploitation in global supply chains is the requirement that migrant workers pay illegal and exorbitant fees to secure jobs overseas. As has been demonstrated time and time again this frequently results in debt bondage among people who are employed in making goods and providing services for multinationals.

Recently the number of companies prohibiting workers’ fees has grown significantly, yet workers are still hard-pressed to find an agency that will support their overseas employment without charging them fees.

Together with our partners at Humanity United, and funded by UK aid, we supported Social Finance UK to explore whether and how an outcomes-based ‘smart subsidy’ could shift norms in the labor recruitment sector, thereby giving workers a chance to prosper rather than suffer due to overseas employment. Report co-author Olivia Hanrahan-Soar of Social Finance UK outlines the report and links to it in a blog on Humanity United’s site here.

We’re holding a webinar discussion between Dan Viederman of Working Capital Fund and report author Jane Newman of Social Finance UK, on July 15 at 8:30am Pacific/11:30 am eastern/4:30pm UK/5:30pm CET. (If there’s interest please let us know and we’ll hold a similar discussion at a time that our Asia-based friends and colleagues can join.)  We welcome your participation – please register here.