Paresh, 29, works in Delhi. In the last three months, he felt a big weight lift-off his shoulders, from being able to finally pay off his EMI instalments in a timely manner. Every month, his EMIs are due before his salary hits his account. This forced him into irregular borrowing behaviour - from tapping into meagre savings that were available one month, borrowing from friends the next and considering a quick payday loan in the third. Then, one day, his Employer began offering Earned Wage Access (EWA) services - the ability to access a portion of his salary before payday - and since, Paresh has found that he can live more stress-free.
Paresh is just one of the roughly 400 mn working Indians who do not have the ability to meet unplanned expenditure with their salary, and instead, live paycheck to paycheck.
Financial literacy - the set of skills and knowledge that allows individuals to make informed, effective decisions with their financial resources - is at a scant 27% in India. With the Pandemic came medical emergencies, job losses, salary cuts, inflation and migration challenges - all of which spurred the need for India to invest not just in increased financial literacy, but more importantly, in financial wellness - an increased financial security and the financial freedom of choice.
As the significance of a financially sound population increases - so does the popularity of Earned Wage Access. In mature markets like the US, industry analysts estimate nearly 55.8 million Earned Wage Access transactions (around $9.5 billion) were facilitated in 2020, up from 37.2 million (around $6.3 billion) in 2019 and 18.6 million (around $3.2 billion) in 2018.
While still a relatively niche concept in India, players like Jify - India’s leading EWA provider- are leapfrogging the Indian workforce from financially literate to financially sound. Though EWA is Jify’s flagship product for solving the short term liquidity challenges, Jify also focusses on the overall financial wellness of the employed workforce through its offering of Smart Spend & Smart Save products on its app. The advantages of an Earned Wage Access product are two-fold:
For a Company, paying heed to their employees' needs means a more secure, mentally sound, thriving workforce - which increases employee satisfaction, productivity and retention. For an Individual, financial wellness is mental wellness. Earned Wage Access can keep them from predatory payday loans, persistent financial pressures and the taboo of having to explain uncomfortable financial constraints to friends, family and workplaces.
Research backs this - nearly 43 per cent of earned wage access users are able to cover all their expenses with their monthly salary, and one in every two users feel optimistic about their financial situation.
Jify sees this financial optimism in blue and grey collared workers like Paresh, every day. With quick and secure access to their accrued wages, employees like Damodar have been able to cover out-of-pocket medical expenses for pregnant spouses. Deepak, has been able to cover urgent travel expenses to his hometown. Kiran was able to take his salary early to professionally upskill. And Aditi, has been able to live with peace of mind, knowing that while she does not have a credit card, Jify will handhold her through any financial emergency.
Financial Wellness in India is no longer a buzzword. With Jify, it’s here to stay.