MyWagePay

Company Profile: MyWagePay's Journey in Kenya

MyWagePay Limited stands as a significant innovator in Kenya's dynamic financial technology landscape. Incorporated in Nairobi in 2020, this digital credit provider has rapidly established itself by focusing on embedded credit and salary-advance solutions. Its primary mission revolves around enhancing financial inclusion, offering essential services such as on-demand wage access, crucial working capital for businesses, and digital banking software tailored for its partners.

Founded by Beth Wambui Mwangi, who also serves as its Chief Executive Officer, MyWagePay operates on a Business-to-Business-to-Consumer (B2B2C) model. This strategic approach involves partnering directly with employers to extend financial benefits to their employees, while also providing integrated credit solutions to Small and Medium Enterprises (SMEs). The company's growth has been bolstered by seed funding from notable investors including TechBridgeHub, Open Startup, BeEntrepreneurs, and Kenya Commercial Bank (KCB).

A critical milestone for MyWagePay was securing its Digital Credit Provider (DCP) license from the Central Bank of Kenya (CBK) in September 2022, placing it among the first ten entities to achieve such regulatory approval. This licensing underscores its commitment to operating within established regulatory frameworks and contributes to its credibility within the Kenyan financial sector. MyWagePay is also a member of the Association of Digital Credit Providers, with its CEO holding a treasurer role, further cementing its active participation in shaping the industry.

Understanding MyWagePay's Financial Offerings

MyWagePay provides two core financial products designed to address distinct needs within the Kenyan market: salary advances for employees and working capital for SMEs.

Loan Products and Services

• Salary Advances: This product allows employees of partner companies to access a portion of their earned salary before their regular payday. Borrowers can typically access up to 33% of their net salary, with repayment automatically scheduled for their next payroll cycle.
• SME Working Capital (Embed & Capital): Tailored for Small and Medium Enterprises, these custom credit lines are often integrated directly into partner platforms. They provide businesses with the necessary liquidity to manage daily operations, seize opportunities, or cover unexpected expenses.

Loan Amounts, Interest Rates, and Fees

Understanding the financial implications is crucial for potential borrowers:

• Salary Advances: Loan amounts range from KES 1,000 to KES 50,000. Significantly, MyWagePay charges 0% interest on these advances. Instead, a transparent, one-time service fee of 1.5% to 3% of the advanced amount is applied. This structure is a key differentiator from traditional interest-bearing loans.
• SME Financing: For SMEs, MyWagePay offers more substantial credit lines, typically starting at KES 100,000 and potentially extending up to KES 5 million. The Annual Percentage Rate (APR) for these loans is estimated to be between 12% and 24% per annum. Additionally, a processing or origination fee of 1% to 2% of the approved loan amount is applied.
• Late Repayment Fees: In the event of delayed repayment, a late fee ranging from 5% to 10% of the outstanding balance may be incurred.

Loan Terms and Repayment

• Salary Advances: The repayment term for salary advances is typically between 1 and 30 days, designed to align with the employee's payroll cycle. Repayment is facilitated through automatic payroll deduction by the employer, significantly reducing default risk.
• SME Loans: SME working capital loans offer more flexible terms, ranging from 3 to 12 months, with various amortization options to suit business cash flow. Repayments for SMEs are typically handled via standing orders, M-Pesa, or direct bank debits.

Collateral Requirements

• Salary Advances: No collateral is required from individual employees, as the employer's partnership and payroll deduction mechanism serve as a form of guarantee.
• SME Loans: For larger credit lines, MyWagePay may require collateral in the form of a charge over receivables or fixed assets, depending on the loan amount and the business's profile.

Navigating MyWagePay: Application, Technology, and User Experience

Accessing MyWagePay's services is designed to be straightforward and digitally driven, catering to the tech-savvy Kenyan population.

Application Process and Requirements

• Application Channels:
  • USSD: Employees can dial *384*104# to apply for salary advances directly from their mobile phones.
  • Mobile App: The app is available for Android users on Google Play, while iOS users can access services through a localized 'PayWage' app.
  • Web Portal: Employers and SME partners utilize a web portal for onboarding and managing credit dashboards.
• Know Your Customer (KYC) and Onboarding:
  • For Employees: MyWagePay leverages minimal KYC requirements, primarily through employer records and an M-Pesa-registered phone number.
  • For SMEs: Standard regulatory KYC procedures apply, requiring company registration documents, director identification, and proof of address.
• Credit Scoring and Underwriting: MyWagePay employs an advanced algorithmic model for credit assessment. This model integrates various data points, including payroll information, mobile money transaction history, and the performance metrics of the employer or SME. Real-time machine-learning risk scores, part of their 'Score Check' system, ensure dynamic and accurate evaluations.
• Disbursement Methods: Once approved, funds are disbursed rapidly. M-Pesa remains the primary method for instant transfers, while bank transfers are processed by the next business day. Cash pickup via partner agents is a rare, less common option.

Mobile App Features and User Experience

The MyWagePay Android app, with over 1,000 downloads and a 4.1-star rating on Google Play, is a central hub for users. Key features include:

• Salary On-Demand: Facilitates quick access to earned wages.
• Budgeting Tools: Helps users manage their finances effectively.
• Savings Vaults: Offers options for setting aside funds.

User reviews generally praise the app's speed and the low fees associated with salary advances. However, some complaints cite occasional USSD downtime, which can hinder access. The iOS 'PayWage' app, while available, has received mixed ratings, with some users mentioning concerns regarding customer support. Common complaints across platforms sometimes include network errors with the USSD code and confusion arising from delayed employer deductions.

Customer Service

MyWagePay offers multiple channels for customer support, including email at [email protected], an in-app chat function, and a phone line at +254 709 549 019. The company aims for an average response time of under 24 hours.

Regulatory Compliance, Market Standing, and Borrower Advice

MyWagePay operates within a regulated environment and holds a distinct position in Kenya's competitive digital lending market.

Regulatory Status and Licensing

MyWagePay's licensing as a Digital Credit Provider by the Central Bank of Kenya in September 2022 signifies its adherence to strict regulatory guidelines. The company is committed to CBK regulations covering interest caps, transparent fee disclosures, and robust consumer protection measures. It also observes GDPR-style data privacy standards and M-Pesa data-security protocols. As of its latest assessment, there are no known enforcement actions or fines against MyWagePay, underscoring its commitment to compliant operations.

Customer Reviews and Market Position

With an estimated 5% market share in the salary-advance segment, MyWagePay is a noticeable player. Its primary differentiation from competitors like Branch, Tala, Okash, and Faircash (which primarily serve B2C clients) lies in its employer-sponsored, salary-deduction model, which inherently lowers default risks. Additionally, its embedded SME credit via API partnerships provides a unique value proposition. Customer feedback, while generally positive for speed and fees, highlights areas for improvement such as USSD reliability and app support.

Comparison with Competitors in Kenya

While many digital lenders in Kenya offer direct-to-consumer loans, MyWagePay's B2B2C model for salary advances sets it apart. The direct payroll deduction mechanism provides a level of security and efficiency often absent in purely individual lending. For SMEs, its embedded credit lines offer a more integrated financial solution compared to standalone business loan applications from other providers.

Practical Advice for Potential Borrowers

For individuals and businesses considering MyWagePay, here is some practical advice:

• Understand the Fee Structure: For salary advances, remember there is a one-time service fee, not interest. For SME loans, carefully review the estimated APR and any processing fees before committing.
• Verify Employer Partnership: If seeking a salary advance, confirm that your employer is partnered with MyWagePay, as this is a prerequisite for eligibility. SMEs should prepare all standard company documentation for their application.
• Manage Repayment Responsibly: For employees, be aware that salary advances are automatically deducted from your payroll. SME borrowers must have a clear plan for timely repayment to avoid late fees and maintain a good credit standing.
• Choose Your Application Channel Wisely: While USSD is convenient, consider using the mobile app for a potentially more stable experience and access to additional features like budgeting tools.
• Utilize In-App Features: Take advantage of MyWagePay's budgeting tools and savings vaults to help manage your finances effectively and plan for future needs.
• Do Not Hesitate to Contact Support: If you encounter any issues, such as USSD errors, delayed deductions, or app performance problems, use the provided customer service channels promptly.
• Compare SME Loan Options: While MyWagePay offers integrated solutions, SMEs should always compare the estimated APR and terms with other business loan providers in Kenya to ensure they are securing the most suitable financing.

MyWagePay presents a compelling option for Kenyans seeking quick access to earned wages or flexible working capital for their businesses, backed by a robust regulatory framework and a commitment to digital innovation.