A staggering 73% of employees rank finances as their number source of stress in life, leading to significant loss of productivity, attrition, absenteeism, presenteeism and other workforce-related problems.
According to Mostafa Ashour, CEO and co-founder of Egypt-based financial wellness company NowPay, employers will typically want to avoid these problems, given the toll it takes on employees and a business, particularly impeding job satisfaction and performance and ultimately impacting employee engagement levels at the workplace.
The pandemic has also heightened employees’ financial anxiety, further increasing the need for financial wellness across the four main verticals that Ashour identified as saving, spending, budgeting and borrowing.
“The idea is if you can save well, spend less or have more optimized spending, if you can budget and plan for your financial life and if you can borrow seamlessly and effectively if and when needed, then you’re financially wealthy,” he told PYMNTS in an interview.
To tackle these challenges and set employees on a path free from financial stress, NowPay was launched in 2019 to help workers take control of their finances and improve their overall financial wellbeing.
Since then, the firm has established itself as a leading financial wellness platform in its home turf of Egypt and was one of the first industry players to launch in the local market and in the wider Middle East and North Africa (MENA) region.
According to Ashour, that first mover advantage is reflected in the quality of the 200 portfolio companies the company serves in Egypt, including nine publicly listed companies and over 20 multinationals and large companies across sectors like real estate, retail, tech and manufacturing.
Overall, the business to business to consumer (B2B2C) company currently manages around 8 billion Egyptian Pounds ($508 million) in salaries, with a 100% corporate retention rate, according to data provided from NowPay.
And further strengthening its leadership position in the market, the company recently partnered with some of the leading brands in the food and beverages sector including McDonalds, KFC, Pizza Hut and Kraft Heinz, covering 40,000 employees in the North African country.
Operating in a country that is quickly rising to the top spot in Africa’s startup ecosystem has also helped boost the company’s growth, given the deep bench of technology talent, a large consumer base of over a 100 million people and a progressive regulator that supports innovators in growing their businesses.
Venture capital (VC) investments have also grown significantly in recent years. “I’ve been in and out of the startup ecosystem for four years, and this is one of the most promising periods that I’ve ever seen,” said Ashour, adding that total VC investment jumped from $6 million in 2015 to close to $200 million in 2020.
The diverse range of domestic and international investors that have injected capital into NowPay, from U.S.-based Y Combinator to Chinese and Japanese investors, also goes to show that Egyptian startups are starting to catch the eye of global investors, he said.
Timely and Convenient Salary Advances
For employees in need of financial assistance, the startup enables them to receive salary advances at any time, with the possibility to request up to 80% of a salary via NowPay’s mobile app.
NowPay is responsible for advancing the money to employees, and the platform has offered to partner companies free of charge with zero liability. More importantly, Ashour said the focus has been providing a seamless experience 100% of the time. “We also integrate with their existing payroll processes so [as not] to cause any additional work or additional burden,” he explained.
The app also gives employees the tools to better manage their finances across the four verticals, from managing their budgets and reminding them when bills are due, to offering peer-to-peer money transfer and crowdfunding services for events like birthdays and weddings.
To help with employees’ shopping needs, the FinTech also provides offers and discounts that are deducted from an individual’s upcoming payroll.
In the two years since it launched, awareness for financial wellness has grown, leading to more demand for this financial wellness service across the country and in the MENA region. As a result, scaling the company rapidly to accommodate the growing needs of the market has been a challenge, one that Ashour will be keenly focused on in the coming months.
“Our main challenge is to keep the level of service the same, to keep the acquisition efficiency the same, to grow the team while keeping the right talent in the team [and scale] the company to match the opportunity available,” he said.
Beyond Egypt, they also have plans of becoming a regional player in MENA, where the 152-million labor force and a pandemic-induced increase in financial anxiety among employees has given way to a huge potential for business growth, Ashour said.
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