In Africa, many employees receive their salaries on a monthly basis. But what happens if you need money before payday? Traditionally, employees would have to take out a loan from a bank or their employer. But these options can be expensive and time-consuming.
That's where earned wage access startups come in. These companies offer employees the ability to access a portion of their earnings before payday. This can be a lifesaver for employees who are facing unexpected expenses or who just need a little extra cash to get by.
Zofi Cash, a Ugandan fintech startup that has just secured $1 million in pre-seed funding from Advancly, is part of a growing wave of African earned-wage access startups, offering employees the ability to access a portion of their earnings before payday.
Founded in 2021 by Paul Kirungi and Gordon Turibamwe, Zofi Cash users can request up to 50% of their monthly salary as an advance via a web app, which is then disbursed to their bank account or mobile money upon approval by their employer.
Zofi Cash has facilitated over $300,000 worth of transactions in the past year, showcasing its strong performance and contributing to its success in securing funding in a challenging investment landscape.
Despite operating with over 20,000 employees on its waitlist, Zofi Cash has been able to serve only around 3,000 individuals thus far. The recent funding, obtained as debt, will enable the startup to expand its reach and cater to a larger user base.