In February 2021, we invested in ImaliPay – a financial services company targeting Africa’s growing ‘Gig economy’.
In Africa, the informal sector remains the major source of income accounting for 85% of employment. Within the informal sector, the ‘Gig economy’ is a growing source of job opportunities for youth. It includes freelance work sourced from digital platforms, such as the ride hailing apps (Uber, Bolt), delivery companies (Glovo), and upskilled digital work. The sector is forecasted to engage 80 million workers on the continent by 2030.
Due to the informal nature of the work, and the fact that gig workers are daily/weekly earners, they experience more volatility in income. With weak credit history and lack of formal employment, they are under-served by financial institutions and struggle to access safety nets such as savings, insurance, loans and other financial services and products.
Launched in 2020, ImaliPay partners with Gig platforms or marketplaces to extend financial services to their workers. This is otherwise known as embedded finance. Currently, ImaliPay offers product loans (i.e. ‘buy now pay later’) directed to fuel, phones, computers – products critical to conduct work. They also offer savings and insurance. By providing access to financial services, ImaliPay helps gig workers improve productivity and drive income. Results from a recent soft launch with a ride-hailing company, shows that with access to ImaliPay’s product loans, drivers can work an extra 36 days/year by reducing the standard ~3-5 days/monthly downtime (equivalent to $350-400 of extra income). Further, the savings and insurance products will help strengthen the worker’s resilience to economic shocks. Finally, ImaliPay helps workers building a credit history through savings and repayments, driving their financial inclusion.