[Nigeria] Cadana reshaping Africa’s payroll system with on-demand pay

A significant number of Nigerian employees typically spend 65 to 80 per cent of their salaries servicing payday loans within the first or second week of being paid. Many employees end up trapped in a vicious cycle of borrowing and refinancing loans at exorbitant interest rates as a result of this practice and the negative impact on jobs and emotional health is significant, Nairametrics reports.

People might seek emergency financial assistance as a result of a car accident, a fire, a life-threatening illness, or theft. For many in these circumstances, the primary choice is a salary advance; which some refer to as a payday loan. Such scenarios can expose employees to loan sharks and high-interest rates, often leading to low productivity at work and affecting workplace dynamics.

A salary advance is a type of loan that is commonly given to employees. As the name implies, it is most commonly a portion of an employee’s pay that is usually received at the end of the month. This loan is obviously only available to those who are employed on a regular salary. This loan, which is typically for a set period of time, is accompanied by interest rates.

A salary advance is a lifeline for many Nigerians. This is because the average Nigerian faces a variety of challenges that necessitate financial obligations. Money must be spent on everything from self-care to assisting siblings, parents and friends, as well as unforeseen emergencies.

As a result, employees’ monthly earnings do not correspond to current market needs. A crate of eggs is currently selling for N2, 400, a 100 per cent increase from six months ago. The same can be said for other market products. 

As a result of the foregoing and the demand for salary advances, financial institutions across the country - particularly tier-1 Deposit Money Banks - have reportedly recognised the pay advance plan as a way to increase their income base. The practice has become increasingly popular among Nigeria’s financial institutions.

Further loan companies are now entering the market, with interest rates ranging from 1.33 to 4 per cent, and the question now being considered is how best to break this loan cycle, assist employees in meeting their needs and accumulating wealth while maintaining workplace productivity.

Cadana’s solution to the monthly payment cycle in Nigeria and its Sub-Saharan counterparts is salary on-demand.

What does Cadana offer?

The monthly payroll system has long been the norm in many African businesses, with employees waiting for the end of the month in order to meet their needs.

One of the many solutions Cadana offers African businesses is access to earned wages via a digitised payroll system. The tech startup is dedicated to accelerating wealth creation for African workers by making their earnings available when they are needed. Meaning employees no longer have to wait until payday to receive their pay.

Cadana’s digitised payroll system enables employees, salaried workers, or contractors to withdraw a predetermined percentage of their real-time earnings and have it instantly transferred into their bank accounts.

Cadana is not giving its employees credit, rather the company says it is democratising the payroll system by allowing employees to access their earned wages and assisting African businesses in creating a more conducive business environment with a dedicated and motivated workforce.

The company - founded by Albert Owusu-Asare and Ameer Shujja - recently expanded its operations from Ghana to Nigeria with the goal of reaching more widely across the African continent by providing solutions that promote wealth creation. Cadana’s Co-Founder said, “Africa’s most valuable resource is its people, and they must have access to funds when they need them.”

Cadana has gone one step further in supporting the HR community as part of its commitment to providing solutions to African businesses by sponsoring the recently concluded HR Expo Africa.

Innovative solutions like this one have shown to be beneficial in sustaining business growth and profitability. 

It is becoming apparent that the future of workplace compensation will be flexible and borderless. Innovative solutions to many issues in the HR space are continuing to emerge.

Source: Nairametrics

(Link and quote via original reporting)

A significant number of Nigerian employees typically spend 65 to 80 per cent of their salaries servicing payday loans within the first or second week of being paid. Many employees end up trapped in a vicious cycle of borrowing and refinancing loans at exorbitant interest rates as a result of this practice and the negative impact on jobs and emotional health is significant, Nairametrics reports.

People might seek emergency financial assistance as a result of a car accident, a fire, a life-threatening illness, or theft. For many in these circumstances, the primary choice is a salary advance; which some refer to as a payday loan. Such scenarios can expose employees to loan sharks and high-interest rates, often leading to low productivity at work and affecting workplace dynamics.

A salary advance is a type of loan that is commonly given to employees. As the name implies, it is most commonly a portion of an employee’s pay that is usually received at the end of the month. This loan is obviously only available to those who are employed on a regular salary. This loan, which is typically for a set period of time, is accompanied by interest rates.

A salary advance is a lifeline for many Nigerians. This is because the average Nigerian faces a variety of challenges that necessitate financial obligations. Money must be spent on everything from self-care to assisting siblings, parents and friends, as well as unforeseen emergencies.

As a result, employees’ monthly earnings do not correspond to current market needs. A crate of eggs is currently selling for N2, 400, a 100 per cent increase from six months ago. The same can be said for other market products. 

As a result of the foregoing and the demand for salary advances, financial institutions across the country - particularly tier-1 Deposit Money Banks - have reportedly recognised the pay advance plan as a way to increase their income base. The practice has become increasingly popular among Nigeria’s financial institutions.

Further loan companies are now entering the market, with interest rates ranging from 1.33 to 4 per cent, and the question now being considered is how best to break this loan cycle, assist employees in meeting their needs and accumulating wealth while maintaining workplace productivity.

Cadana’s solution to the monthly payment cycle in Nigeria and its Sub-Saharan counterparts is salary on-demand.

What does Cadana offer?

The monthly payroll system has long been the norm in many African businesses, with employees waiting for the end of the month in order to meet their needs.

One of the many solutions Cadana offers African businesses is access to earned wages via a digitised payroll system. The tech startup is dedicated to accelerating wealth creation for African workers by making their earnings available when they are needed. Meaning employees no longer have to wait until payday to receive their pay.

Cadana’s digitised payroll system enables employees, salaried workers, or contractors to withdraw a predetermined percentage of their real-time earnings and have it instantly transferred into their bank accounts.

Cadana is not giving its employees credit, rather the company says it is democratising the payroll system by allowing employees to access their earned wages and assisting African businesses in creating a more conducive business environment with a dedicated and motivated workforce.

The company - founded by Albert Owusu-Asare and Ameer Shujja - recently expanded its operations from Ghana to Nigeria with the goal of reaching more widely across the African continent by providing solutions that promote wealth creation. Cadana’s Co-Founder said, “Africa’s most valuable resource is its people, and they must have access to funds when they need them.”

Cadana has gone one step further in supporting the HR community as part of its commitment to providing solutions to African businesses by sponsoring the recently concluded HR Expo Africa.

Innovative solutions like this one have shown to be beneficial in sustaining business growth and profitability. 

It is becoming apparent that the future of workplace compensation will be flexible and borderless. Innovative solutions to many issues in the HR space are continuing to emerge.

Source: Nairametrics

(Link and quote via original reporting)