42% of workers run out of cash before payday – Earnipay

Earnipay, a fintech company that offers wage earners flexible, on-demand wage access, has found that 42 percent of workers in Africa run out of cash before payday.

According to the company, this results in up to 27 working days lost per employee per year due to money-related stress.

On Wednesday, June 22, 2022, Earnipay Founder and Chief Executive Officer, Mr. Nonso Onwuzulike, said at a media roundtable in Lagos that employers need to eliminate financial burdens that prevent even top talent from performing at their best in order to increase productivity of their teams, companies can use 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 percent of employees would like more financial support from their employer

“Most workers in Africa are paid monthly but live paycheck to paycheck. Monthly wages are low as opposed to more developed countries like the US where weekly or bi-weekly wages can cover this lifestyle.

“What ends up happening is that income earners take on payday advances or borrow money from payday lenders and loan sharks to meet their day-to-day expenses and emergencies, and they end up in a debt cycle,” he said.

While Onwuzulike explained that Earnipay does not provide salary advances, but funds equivalent to 50 percent of days worked in a month, noted that some individual companies have attempted to address this issue internally and allow employees to access their daily salaries work for it.

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The company says it aims to improve employee financial wellbeing by working with employers and seamlessly integrating with their payroll systems to offer its services to employees, who can then track and withdraw their accrued salaries through the app any day of the month .

“At the end of the month, the employer deducts the withdrawn amount from the employee’s salary, uses it to refund Earnipay, and then pays the employee the remaining amount as that month’s salary,” Onwuzulike said.

Financial worries in his opinion,

are the leading cause of distractions in the workplace. The monthly pay cycle means employees are often unable to afford day-to-day expenses, cover emergencies, or take advantage of immediate financial opportunities.

“As a result, they are exposed to predatory payday loans and stuck in endless debt cycles with unrealistic payback periods and expensive interest rates.

“Earnipay exists to address this issue and offer an ethical alternative to instant pay, while helping employers improve employee engagement and retention without incurring any cost to their business.

“The future of salary is on-demand and we are excited to be pioneering this amazing solution in Africa. I am pleased to be working with a group of highly respected investors who understand the need for a platform like Earnipay to promote greater access to salaries and most importantly improve the financial wellbeing of earners in Africa, he stated.

Other team members, including Esther John, Sakes and the head of business development, also explained that Earnipay charges employees a small processing fee of NGN 250 or NGN 500 for this access. There’s no payback and no interest charge because employees access 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 raised $4 million, and with the seed funding, Earnipay will accelerate the development of its technology platform to serve employers of large corporations. In this way, the technology company provides its employees with the tools they need to make better financial decisions and improve their quality of life.

The company plans to offer its on-demand salary solution to 200,000 employees by the end of 2022 and has already served over 40 companies, outsourcing firms and HR solution providers in Nigeria.

Employers can log into Earnipay through the web platform to access the employer dashboard and add their employees in one easy process.

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42% of workers run out of cash before payday – Earnipay

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42% of workers run out of cash before payday – Earnipay

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