Earnipay, a fintech company that provides flexible, on-demand access to employees, revealed that 42% of employees in Africa run out of money before payday.
According to the company, this causes employers to lose up to 27 days of working hours per employee per year due to money stress.
Speaking at a media roundtable in Lagos on Wednesday, June 22, 2022, Earnipay Founder and CEO Mr. Nonso Onwuzulike said that for employers to improve the productivity of their teams, eliminate the financial stress that prevents even star employees from performing optimally. , businesses can take advantage of Earnipay’s services to take care of weekly or bi-weekly salaries that suit the lifestyle of some low-income earners.
According to him, 67% of employees want more financial support from their employer.
“Most of the African workforce is paid monthly, but lives on paycheck to paycheck. Unlike more developed countries like the United States, where weekly or bi-weekly wages can support this lifestyle, low monthly wages.
“So what ends up happening is that wage earners take payday advances or borrow money from payday lenders and loan sharks to offset their day-to-day expenses and emergencies, eventually falling into a debt cycle,” he said.
While explaining that Earnipay does not provide payday advance, but funds equivalent to 50% of days worked in a month, Onwuzulike noted that a few individual companies have sought to address this internally and allow employees to access their daily salary as they work for it.
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The company says it wants to improve the financial well-being of employees by partnering with employers and seamlessly integrating with their payroll systems to offer its services to employees, who can then track and withdraw their accrued wages through application any day of the month.
“At the end of the month, the employer deducts the withdrawn amount from the employee’s salary, reimburses Earnipay with it, and then pays the employee the balance as salary for that month,” Onwuzulike said.
Financial worries, he said.
are the number one cause of workplace distractions. The monthly pay cycle means employees are often unable to pay day-to-day expenses, cover emergencies, or take advantage of immediate financial opportunities.
“As a result, they are exposed to predatory payday loans and get stuck in endless cycles of debt with unrealistic repayment periods and high interest rates.
“Earnipay exists to solve this problem and provide an ethical alternative to instant access to pay while helping employers improve employee engagement and retention at zero cost to their business.
“The future of pay is on-demand, and we’re thrilled to be pioneering this incredible solution in Africa. I’m excited to partner with a group of highly respected investors who understand the need for a platform like ‘Earnipay to improve access to wages and, above all, to improve the financial well-being of employees in Africa, he said.
Also speaking, other team members including Esther John, Sakes and the Business Development Manager explained that Earnipay charges employees a nominal processing fee of NGN 250 or NGN 500 for this access. There are no refunds or interest charges because employees have access to what they worked for, it’s their money, they said.
The funding round was led by Canaan, with participation from XYZ Ventures, Village Global, Musha Ventures, Ventures Platform, Voltron Capital and Paystack.
According to the company, Earnipay has received US$4 million and with the seed funding, Earnipay will accelerate the development of its technology platform to serve large enterprise employers. In doing so, the technology company will provide employees with the tools they need to make better financial decisions and improve their quality of life.
The company plans to offer its pay-on-demand solution to 200,000 employees by the end of 2022 and has already served more than 40 companies, outsourcing companies and HR solution providers in Nigeria.
Employers can sign up for Earnipay through the web platform to access the employer dashboard and add their employees in a simple process.
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42% of employees run out of money before payday ― Earnipay
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42% of employees run out of money before payday ― Earnipay
