Paymenow, a South African startup that provides earned wage access (EWA), has secured a ZAR250 million ($14 million) debt facility from Rand Merchant Bank (RMB) to support its expansion plans.
Paymenow raises R250 million debt facility through @RMBCIB to expand access to earned wages.
Read the full press release here: https://t.co/TtMmcLVvhE#earnedwageaccess #bank #business #success #future #financialwellness #RMB #Paymenow #fintechnews
— Paymenow (@PaymenowGroup) April 3, 2023
According to the startup, Earned Wage Access is a financial wellness offering to employees which allows them to access a percentage of their accrued wages before the end of their payroll cycle. It enables employees to unlock funds without the threat of a costly loan and with the added benefit of building savings and getting out of the risky financial cycle altogether.
The startup adds that the EWA fintech empowers staff by giving them access to their already earned wages through a mobile app and website while promoting responsible financial behaviour and encouraging a saving culture.
The deal with RMB comes after Paymenow’s remarkable expansion in various industries such as retail, mining, security, cleaning, and facilities management. Presently, the platform caters to more than 200,000 workers, and its growth is expected to double in the next year.
“There is tremendous demand for Paymenow’s services in South Africa, which has 25 million active credit customers, of whom, more than 10 million are behind on their payments,” said Paymenow’s Group chief executive, Deon Nobrega.
“As such, the population of people looking for access to liquidity is enormous, and our ability to provide this liquidity without compromising financial health is having a remarkable positive impact. Access to funding, such as through the agreement with RMB, is a gratifying acknowledgement of the strength of our model, and a key enabler of our future growth.”
PayMeNow is founded by Deon Nobrega alongside business development head Bryan Habana (a Rugby World Cup winner), technical director, Willem van Zyl, head of software development, Gerry Potgieter, and founder investor Garth Mackintosh
The startup has a hybrid salary system which provides companies with the option to offer their workers flexible payroll schedules, including monthly, weekly, or even daily pay cycles. This system is said to assist employees who need access to a portion of their salaries – typically for transport, groceries, and utilities – as and when they earn it.
According to Paymenow, a recent independent impact report surveyed 400 Paymenow customers, and the results showed that almost all respondents reported an improvement in their overall quality of life because of Paymenow, with nearly two-thirds reporting significant improvements.
The report found that:
- 83% of customers had experienced an improvement in their ability to save
- 95% of customers had reduced borrowing from money lenders, and
- 83% had more cash on hand to deal with emergencies
Nobrega stated:
“Our objective is to ease the burden inflicted by unregulated short-term money lenders through affordable, real-time access to earned wages and to educate and assist South Africans in reaching their financial goals.”
Paymenow has expanded its services into Namibia and Zambia making it the first earned wage access provider to launch in those countries, according to one report. The company has gained significant traction in both the private and public sectors and plans to continue its expansion into additional strategic jurisdictions in Africa, including Lesotho, Ghana, and Kenya.
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