Earned wage access fintech platform Paymenow has raised a R250 million debt facility, through Rand Merchant Bank (RMB), in a move that will allow it to expand its offering.
The financial wellness platform says its clients have increased to over 200 000 employees since inception in 2019, with the new agreement expected to help double this number in the next year.
With presence in Namibia and Zambia, Paymenow says it intends to scale to additional strategic jurisdictions across Africa, including Lesotho, Ghana and Kenya.
The app allows low-income workers to access part of their earned wages before payday, offering a way for South African low-income earners to even out their cash flows throughout the month.
Through integrating into employers’ payroll systems, it enables employees to unlock funds without the threat of costly loans, and with the added benefit of building savings and improving financial wellness.
According to a statement, the new debt facility agreement comes off the back of Paymenow’s growth in the retail, mining, security, cleaning and facilities management industries.
Deon Nobrega, CEO of Paymenow Group, notes: “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.
“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.”
Most companies have cyclical cash flows, which make it difficult to allow employees the flexibility of monthly, weekly or even daily payrolls.
The company says its vision 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 to reach their financial goals.
RMB is an indirect shareholder in Paymenow by virtue of its shareholding in investment company DNI Group. It says it’s looking forward to continuing to holistically partner with Paymenow, to make a positive impact on society through financial education and financial wellness.
In a recent impact report based on independent research conducted among 400 Paymenow customers, 83% said their ability to save had improved, and 95% had been able to reduce borrowing from money lenders after using the Paymenow service.
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