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Why This Gap Supplier is Digitizing Wages in Egypt

An American Eagle Outfitters, Gap and Under Armor supplier is digitizing its wages to better financially empower its largely female apparel workforce in Egypt.

Alpine Group, which operates Alex Apparels in the north African nation, is working with BSR’s HERfinance program to educate its workers about the advantages of shifting from cash to digital wages, offer guidance on how to evaluate the risks and benefits of different financial services, and provide training on financial planning, management and the use of digital tools.

“Sustainability is at the very core of Alpine Group, due to it being paramount to the future of the fashion industry,” said Clare Woodford, global director of impact and marketing at Alpine Group. “This makes supporting such a powerful program in empowering women alongside the global acceleration toward digital finances a great fit for us.”

Paying workers digitally rather than with cash benefits both factories and workers through increased efficiency, financial inclusion and women’s economic empowerment, according to HERproject, the broader worker well-being platform encompassing HERfinance. Its data shows, for instance, that digitization cuts the administrative time factory managers spend on payroll by more than half. The time workers spent away from the production line on payday also fell by 78 percent.

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Digitization, HERproject said, allows women to feel more in control of their finances. During one pilot, the number of women who reported handing over their salary to someone else tumbled by 10 percent. After entering the program, participants were 17 percentage points more likely to feel confident about being able to meet their family’s expected future expenses for the next two years. There was also a 21 percentage point jump in workers who said they were now saving regularly.

Alex Apparels, which plans to open a LEED Gold-certified “factory of the future” in Alexandria next year, will be placing workers who went through an initial launch of the program in the role of “peer educators” at its different facilities. Each peer educator will share information with 10 to 20 of their colleagues. The goal is to reach a minimum of 2,000 production-floor employees.

“The support of Alpine Group is paramount in our journey to driving change,” BSR said. “Alex Apparels’ leading facilities in Egypt will play a crucial part in the support of providing peer educators to deliver a greater understanding [of] the digitalization of wages. With its support, the growth of financial inclusion and the empowerment of women in global supply chains will thrive.”

News of the partnership follows Alpine Group’s announcement in May that it is the first fashion manufacturer to embrace the Future-Fit Business benchmark, a science-based strategic management tool that helps companies measure, address and improve their sustainability performance in alignment with the United Nations Sustainable Development Goals.

“A lot of businesses out there talk of being sustainable, putting out lofty goals of what they’re looking to achieve, but our question is always well, how do they know that they are meeting their targets? And how are they measuring against their commitments?” Woodford previously told Sourcing Journal. “And that’s really where we chose to undertake the benchmark because it gives you a science-based destination to aim for.”

The HERfinance digital wages program is financially underpinned by the Bill & Melinda Gates Foundation. Companies that have participated in the scheme in countries such as Bangladesh and Cambodia include Bestseller, Fast Retailing, H&M, Inditex, Li and Fung, Target and The Children’s Place.