The COVID-19 pandemic has undoubtedly presented unforeseen challenges to deploying capital and monitoring investments. Despite the pandemic’s continuing challenges, such as travel restrictions, FINCA Ventures continues to make new investments. Earlier this year, FINCA Ventures established a new partnership with ImaliPay after adapting its due diligence method to use technology to remotely evaluate new investment opportunities.
Since financial institutions are not equipped to meet the needs of gig workers or those who work in the informal sector, Tatenda Furusa and Sanmi Akinmusire, co-founders of ImaliPay, developed a digital financial services platform that offers customized marketplace products and services to help African gig economy platforms and gig workers become more integrated into the financial system. ImaliPay uses an API to link directly to partner gig platforms (such as SafeBoda Nigeria and Bolt Kenya) to collect data on their gig workers in order to determine credit risk, such as when they first joined the platform, their customer ranking, and the average amount of money they receive via the app. Utilizing this data, ImaliPay provides savings products, as well as in-kind loans for exchange tools such as smartphones, which are used to access mobile apps for capturing gig work, motorcycle spare parts and fuel, and cash advances for freelance work. Through an integrated financial strategy, ImaliPay can accommodate both those who have a long-standing banking relationship and those who do not.
As many of the gig workers are regular and weekly earners with erratic income flows, they are subjected to more frequent income shocks. Traditional financial institutions are underserving more than half of gig workers, who lack a safety net of savings and are unable to access efficient finance due to a lack of basic reporting standards such as pay slips. Many of the existing gig economy platforms lack the resources and in-house experience necessary to offer financial services on their own to their workers, but see value in collaborating with ImaliPay because these products help to maximize the productivity of their workers and reduce down-time away from the app, resulting in increased revenue and worker loyalty.
ImaliPay helps blue-collar workers (earning on average $300 a month before ImaliPay) boost productivity and income potential, develop credit through savings and timely repayments, and establish a financial safety net by offering access to savings and in-kind loan. As ImaliPay grows, it will be well-equipped to bundle additional financial services, such as accident and hospital coverage insurance.
FINCA Ventures decided to invest in ImaliPay due to the strength of the founding team, the sheer size of the market opportunity, and because of the future potential in ImaliPay unlocking new lending and deposit mobilization opportunities for FINCA subsidiaries which will ultimately support ImaliPay’s expansion across the continent. ImaliPay is well poised to take the gig economy by storm, with partnerships with a few mobility platforms underway in Nigeria and Kenya.