Salary advance benefits to employees in Kenya can have widespread impact to both employees and to their dependents. With close to 1.34 million of the 2.9 million formal workers in Kenya earning less than Ksh 30,000, providing workers liquidity to match their income to their expenses can drastically reduce the financial strain on employees while also significantly improving the productivity and employee retention rate of a business.
Fuliza is an overdraft facility that allows Safaricom subscribers in Kenya to transact with more money than that available in their M-PESA mobile wallets. Additionally, Fuliza with 33.9 million active users by the end of 2022 according to NCBA, have accessed Ksh 384 billion in FY 22 signals deepened debt dependence among Kenyans, hence the need for a solution that suits low-income earners in Kenya.
There are HR software vendors that provide employer-sponsored salary advance benefits to employees in Kenya through a simple and ready-for-use mobile app. As such, employees can access interest-free salary advances in Kenya through the app accessed from Google Play. Moreover, employees get to avoid costly debt that can lead them to have negative pay cycle in subsequent months.
Benefits of early instant salary advances in Kenya
- Improve employee retention
Providing instant salary advances can be used by employers to retain employees. Salary advance benefits provided by employers using the HR platforms can help reduce stress in the workplace that can affect the productivity of a worker.
- Reduce debt dependence
Instant salary advances enable employees to access salary advances for their emergency needs when they need it with no interest charges. As a result, employees who work in places offering early salary advances can avoid taking costly debt to fund their daily needs.
- Employee job security and stability
Employer-employee relationship is one based on trust. Hence, an employer offering employees with the ability to access part of their earnings throughout the month as they earn it encourages workplace coherence and gives the employee a sense of security and confidence about the business as a going concern.
Is this the new norm?
Providing employees access to a part of their salaries before payday, also known as early wage access, is a case-by-case consideration based on the industry and how remuneration works in an organization.
