Most employees in Pakistan live paycheck to paycheck, not having savings for emergencies or random bills. Many pay their bills late, as payroll disbursement often does not coincide with bill cycles, incurring hefty payment fees. Fewer than 20% of the population have access to formal credit; banks are stringent in their underwriting and have not been focused on consumer lending due to high returns on treasury investments. In a population of 220M, consumer finance products have a total value of less than $3.5B. Meanwhile the total value of monthly payroll processed in Pakistan is between $6B and $8B. Without access to credit, people turn to friends and family, try to get advances from their employer, or resort to loan sharks.
The idea for Abhi came from first hand experience of constantly being asked for money by friends and family and speaking to companies on how often they have seen requests for salary advances. We also have seen how it takes over 45 days to get a loan from a bank or get approved for a credit card. My cofounder Omair, who was working at Morgan Stanley, had also been studying the early wage access model around the world and the uptake it had in emerging markets. After running a small pilot with 400 employees, we decided to work on a B2B2C model to provide advances to consumers via their employers to reduce delinquency risk.
We partner with employers to offer financial well-being benefits that improve retention, productivity and employee engagement. Our mission is to help millions of people across Pakistan live healthier, happier financial lives. We do this by offering: access to their salary as it is earned; affordable advances; and engaging financial education. In surveys we have found employees using these funds for utility bills, home maintenance, fixing their vehicles, medical expenses, and weddings.
We provide instant access to earned wages to all employees of any company that has signed on with us, without the need for any documentation. We allow this through 4 touch points: a mobile app, 2 way SMS, WhatsApp, and a web portal. The funds get sent to the employee within a minute, to their existing payroll account held in any bank or mobile wallet in Pakistan. We also provide advances when needed, for which we charge a flat 2% transaction fee. These are collected on the next payroll, eliminating late fees and loan shark interest rates.