Fintech startup GajiGesa Provide Early Salary Access for Employees

The monthly payroll system in Indonesia on the one hand has issues for most workers. According to BPS data, Indonesia has at least around 129 million workers, many of whom face financial stress and difficulties caused by irregular cash flows, monthly payment schedules, unexpected expenses, and limited access to finance.

The World Bank FINDEX estimates that 70% of Indonesians borrow money from unofficial institutions, often with high interest rates and tense collection systems. This issue is tried to be answered by GajiGesa which was started in late 2020 by Martyna Malinowska (formerly Product Lead of Standard Chartered Bank and Product Director of LenddoEFL) and Vidit Agrawal (formerly Head of Business Development for APAC Strap, COO of CARRO, and Uber's first employee in Asia).

In a joint interview DailySocial, Agrawal explained that the initial idea was first put forward by Martyna, when at LenddoEFL she had to work extensively with blue-collar employees, most of whom were unbanked since 2016. Martyna saw firsthand that the challenges faced by factory workers to get access to finance were very limited, especially when getting additional capital. .

If they can, they choose to take a short tenor because there are liquidity problems. However, this is contrary to the principle of lending in financial institutions in general, they are required to take long-term loans with higher nominal loans or short-term loans with high interest rates.

At the same time, Agrawal was working in Southeast Asia for Uber. Drivers' average income is $250 per month, excluding Singapore. The main issue they face is also harassment by lenders. “Seeing the many challenges faced by blue-collar workers to complete fair and reliable short-term access to capital is an inspiration for GajiGesa, "said Agrawal.

GajiGesa provide services for employers and employees in expediting cash flow with financial products, including access to flexible salaries or called Flexible Earned Wage Access (FEWA), financial education, bill payments, analysis real-time, and others.

For employees, GajiGesa provide early salary access for current month employees on a regular basis real-time, which can be used to pay bills, buy credit and data packages, and access financial education.

As for employers, analysis platforms GajiGesa provide the HR team to effectively measure the effectiveness of financial health strategies, gain visibility real-time to engagement, maintain retention and productivity, and the financial health of employees.

Employers have the flexibility and control to offer FEWA to all employees, can decide whether they want to take this service for employees at an additional cost or as part of a benefit package.

Agrawal asserts, the concept GajiGesa different from a loan cash loans as the company runs lending mostly in Indonesia. Instead, the company cooperates with various multi-industry companies, integrates with partner companies with HRIS systems and payroll, ensuring efficient and fast integration.

Regarding the permit at OJK, he only said that currently the company has a good relationship with OJK and is excited to continue working with regulators to ensure the technology can benefit as many Indonesians as possible.

Currently the company has partnered with 30 companies with a total of tens of thousands of employees served in Indonesia.

Pocket for early stage funding

GajiGesa announced a $2,5 million seed funding led by defy.vc and Quest Ventures. GK Plug and Play, Next Billion Ventures, Alto Partners, Multifamily Office, Kanmo Group, and some angel investors strategically participated in the round.

In an official statement, partner devy.vc Bob Rosin said, “The lack of access to safe and reliable consumer credit is a critical problem in emerging markets. The majority of the 129 million workers in Indonesia belong to the category unbanked. It is an honor to work with GajiGesa to support their mission of helping millions of hard workers achieve financial well-being and security in their work.”

Quest Ventures partner Yiping Goh also added, GajiGesa helping lower-middle income workers living paycheck to paycheck, dealing with often stressful cash flow issues by providing the financial stability that employers and their employees desperately need, during times of economic uncertainty like today.

With this fresh fund, Agrawal will use it to expand its range of services, including investments in sales and customer success, and expand its technology team in Jakarta. "GajiGesa want to add more features wellness for employees to provide a better experience when using the platform,” he concluded.

Global trend

In a Gartner study, it is predicted that by 2023 20% of US companies with a majority of hourly workers will implement flexible salary access solutions as part of efforts to improve employee experience, engagement, and retention.

This initiative was answered by various companies there through partnerships with fintech. Among them, Square launched a payroll product on demand, Visa and PayPal are working with flexible pay access providers, and Wagestream is also taking advantage of this opportunity in Europe.

In the research conducted GajiGesa it was found that more than 85% of the workers reported that their financial stress was reduced after getting access to flexible pay whenever they needed it. Then the most common reasons for workers to access salaries early, including for investment purposes, paying debts, home renovations, vehicle repairs, and medical expenses.

However, unfortunately not all companies can provide this because it is expected to threaten the sustainability of the company's cash flow. In the same spirit, this solution is actually already glimpsed by KoinWorks, through the KoinGaji product.

In terms of status at OJK, KoinWorks, which has now established itself as a Super Financial App, has been registered as an IKD operator in the Aggregator cluster at OJK. For products p2p loans itself, already has a permit.