Nigeria’s Underbanked Gig Workers Flock to One-Stop-Shop Financial Platforms

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It’s been over a decade since Uber first launched its ride-hailing app in San Francisco, and in the years since, the notion of the gig economy has come to define a platform-based freelance employment model that takes Uber as its archetype.

But gig work has evolved: alternative platforms have entered the market, governments have imposed regulations and the concept has been adapted for other industries besides ride-hailing.

In emerging markets across Africa, gig platforms have boosted employment and continue to expand economic opportunities for millions of self-employed workers, freelancers and independent contractors.

But many of these workers are underbanked, with limited access to credit or savings products that are essential to keeping business afloat in challenging times or enabling micro-entrepreneurs to pursue new opportunities.

Tatenda Furusa, co-founder of ImaliPay, first observed the difficulties gig workers face accessing financial tools when his Uber ran out of fuel mid-journey because the driver’s payment had been delayed.

As he told PYMNTS, the incident raised a question: “How do we solve the financial problems or challenges that these freelancers face in Africa?”

That answer came through the launch of ImaliPay, a Nigerian FinTech firm which aims to be a one-stop-shop for the region’s underbanked gig economy workers in need of productivity enhancing and financial services such as savings, credit and insurance.

To do this, the startup takes a two-pronged solution that connects to users at one end with a mobile app, and to gig platforms at the other thanks to an application programming interface (API).

“We play a very good role as a middle layer for both [sides] not to get actively involved, since they’re not nine-to-five employees and ImaliPay sits in between as a conduit to allow them to access these services,” Furusa explained.

Gig Economy: The Future of Work

On the one hand, modern gig workers often operate on multiple platforms, giving them the opportunity to earn more money and choose which income streams are most advantageous to them at any given time. Having access to an app that is connected to the various gig platforms and not tied to any single service means they can access financial services without having to forfeit flexibility and choice, Furusa noted.

On the other hand, the ImaliPay API creates a healthier ecosystem for gig workers while the platforms get to maintain the arms-length contractor-contractee relationship that underpins the gig model, he added.

What’s more, with an API-centered approach, ImaliPay can better verify gig workers to offer them in-kind loans in the form of a buy now, pay later (BNPL) product linked to the gig work in question.

“Show us who you work for, your income statements, then [ImaliPay] provides you a service tied to the nature of your gig, […] you can get access to BNPL fuel, spare parts, phones. And it’s all through a closed-loop ledger, which shows how much you’ve earned and how you can use that ledger to borrow, transact or save,” Furusa said, explaining the process.

The solution is simple but effective. ImaliPay has data from its platform-facing API that keeps risk low, and the BNPL model means that borrowers “are more likely to repay because they want to come back to that source to get another BNPL for the gig, which keeps them on the road and keeps them earning income,” he pointed out.

ImaliPay is currently available to gig workers in three African markets — Kenya, Nigeria and South Africa — each of which comes with its own socio-economic challenges and opportunities.

But overall, Furusa argued that the gig economy is “the future of work globally,” and moving forward, ImaliPay will remain “well positioned as the de facto financial sidekick and social net social safety net partner for gig workers across the continent.”

And with new gig-style work models cropping up in industries from banking to hospitality, his prediction may well prove to be right.

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