Home ›› 10 Mar 2023 ›› Back
In a world where everything can be accessed on-demand, from grocery shopping, plane tickets, and bill payments to medical needs, why should a person have to wait to get their salary after the end of every month?
While this is a simple question, it addresses very vital needs, and this is precisely what “wagely” offers — solutions to every financial concern associated with these needs.
wagely is a unique financial well-being solution that allows employees from low and middle-income segments to access their earned salary on demand without having to wait for payday, which is mostly known as Earned Wage Access (EWA).
Living month to month, most middle and low-income earners struggle to cover unexpected expenses between paycheques. Mitigating this immediate daily need, through the EWA, is the first step to developing a holistic financial wellness platform for these working groups.
wagely started its journey in 2020 when people across the world were suffering because of the Covid-19 pandemic. Observing how the pandemic not only affected people medically but also financially, wagely was first tested as a platform in Indonesia. Then it managed to raise funds to expand and launched in Bangladesh in 2021.
“Fast forward to 2023 and wagely is now a platform serving over 350,000 employees across Asia,” the platform’s CEO and Co-founder Tobias Fischer told The Business Post.
He said, “In our 15 months of operation in the RMG industry, we found out that low or irregular salary has a long-lasting negative impact on individual financial well-being, impacting businesses with higher migration or turnover, lower productivity and a financially stressed workforce.”
“Of course, as pioneers in both markets [Bangladesh and global], we faced hurdles while introducing a new financial wellness category. However, our growth has been tremendous.
“With our headquarters in Singapore, we are now a team of almost 100 members who are driving the wagely vision in both countries with over 200 employers,” he added.
Making financial services accessible
Fischer said, “To serve our users better, we have included additional features, such as real-time transfer and free financial literacy modules.
“To double down on the impact we have partnered with USAID, UNCDF and BGMEA, and are very humbled that our impact was not just recognised but was also awarded when we won the 2022 Inclusive Fintech 50.”
“While the list goes on, it all comes down to the fact that wagely is a holistic financial wellness platform making financial services accessible to the bottom of the pyramid,” he stressed.
He added, “We are proud to have strong support from some of the region’s largest and most reputed Venture Capitalists (VCs), development banks and global donors, who see and believe in the incredible impact of wagely. That massive support has helped wagely raise a total of $14 million since our launch.”
“Our backers who are very strongly aligned with our vision to work towards financial inclusion without boundaries include East Ventures, Integra Partners, ADB Ventures, Global Founders Capital (GFC), Trihill Capital, Blauwpark Partners, 1982 Ventures, and Central Capital Ventura, the VC arm of Bank Central Asia (BCA), amongst others,” said Fischer.
How relevant is it for Bangladesh?
Fischer said that Bangladesh plays an integral part in their strategy and it has become even more relevant due to increasing inflation and additional pressure on workers’ day-to-day life.
There are 4.5 million RMG workers and around 90 million low to middle-wage earners in Bangladesh, including those in the agricultural sector.
“Despite the tremendous digitisation achievement we have seen in recent years, we still have a long way to go to provide affordable and responsible financial services that is accessible to all,” he added.
For any white-collar salaried employees, formal financial services are readily available, whether through credit cards, loan products, deposit schemes, insurance or any other services the financial service industry offer. These services are, however, still a distant reality for millions of low and middle-wage earners.
“With the current infrastructure in place, I believe, today, Bangladesh is completely ready to adopt disruptive fintech solutions like wagely, which goes beyond traditional services and ensures the financial security of the most vulnerable segment,” Fischer continued.
“As we are expanding beyond RMG to non-RMG industries too, we are very excited to have just opened our second office in Chattogram, due to the tremendous demand for wagely, and launched with several employers recently,” he added.
Reducing dependency on loan sharks
Talking to The Business Post, Fischer said, “After one year in Bangladesh, I see ourselves partnered with some of the biggest groups in both the RMG and non-RMG sectors, serving a pool of nearly 150,000 customers from 35 employers. In addition, we have formed strategic partnerships with BGMEA, bKash, UNCDF, USAID and others.”
“But the real success still lies within our users and the positive impact we have been able to make in their lives,” he added.
In Bangladesh, over 85 per cent of workers from across partner factories have mentioned that they are less worried about their financial health and there has been a drastic drop in employee turnover for our employers, which further add to the claim, he said.
“Our users proudly share that wagely has not only supported them to reduce dependency on loan sharks but is also supporting them to pay their regular bills on time,” he said.
Besides this, Fischer added, they have also heard that many female users — often responsible for their entire household or who are single mothers — are now able to save because of wagely.
A common scenario in low-income households is that the female workers’ wages are controlled by their husbands or in-laws. The ability to withdraw a portion of their salaries before payday has allowed a lot of women to protect their money and even start their savings, he said.
Challenges in Bangladesh
“I would not call it a “challenge” exactly, but it is true that EWA is a fresh concept in Bangladesh that wagely is pioneering, and while we are observing a significant impact, it still requires awareness and education,” Fischer stressed.
“It does take time for a market to fully comprehend the endless possibilities new products can bring,” he added.
He continued, “At the same time, every market is different. Our operation model in Indonesia and Bangladesh is not the same. We quickly understood the local differences and adopted our execution strategy accordingly.
“For example, Bangladesh still has lower smartphone penetration and a gap in overall digital literacy, which made us create alternative channels for allowing customers to access their salary.”
They have integrated with bKash for real-time disbursement to their wallet and other such integrations are coming forth, which is also not a case in other markets where there are switches and aggregators available and one-to-one direct integration is not necessary, he said.
“I would say it’s a very exciting market and we are learning every day and adapting our solution to best fit the market’s needs,” he added.
Goals
Bangladesh has already been through a breakthrough, thanks to the digitisation wave that has supported so many individuals, especially those in the lower income bracket to learn about financial technology and the roles they play in their lives.
Over the years, the government and the regulators have developed a strong infrastructure that now supports people to use financial services at the tip of their fingers, Fischer told The Business Post.
“Very recently we have witnessed the launch of interoperable digital transaction platform Binimoy and this is a massive gateway for a fintech like wagely and our goals are aligned with that of the country,” he said.
He added, “We have actively participated in discussions regarding the relationship between fintech and the growth of Bangladesh, and believe there is room for more innovation and wagely would definitely be a contributor to that.”
“Our vision is to ensure financial inclusion and financial wellness for Bangladesh regardless of economic status, race or gender.
“We want to capitalise on the EWA solution across different industries targeting the 90 million low and middle-waged working people. At the same time, wagely wants to actively work with the development sectors, employers and policymakers for expanding financial inclusion and literacy across this segment.” Fischer said.
In a mid-term plan, he said, they will also look into offering other financial services to their customers such as savings, loans and insurance by partnering with the right financial Institutions to further contribute to the holistic financial well-being of their users.
“The goal is to educate and nurture our customers to be financially resilient and responsible, and play a role in building their financial independence,” he added.
