adminAs the Kenyan economy transitions to embracing a more Western payment system, workers in Kenya’s informal sector will now receive compensation for the days they have worked whenever they need it.
Workers in this sector, who are also known as blue-collar workers, have had to wait until the end of the month to receive their salaries, a practice that payroll solution providers claim is driving them further into debt as they look for loans to pay for school expenses.
A platform where employees would get compensated for the days they have already worked has been developed as a result of a recent agreement between SeamlessHR and the Melinda Gates Foundation.
According to industry participants, the model will assist employees in enhancing their production at work while also allowing small businesses to manage their personnel and generate financial history in order to obtain loans.
Bidco Kenya’s CEO Vimal Shah noted that most Juakali employees and small traders are not institutionalised and hence lack collateral to present to financial institutions, and as a result, are frequently denied loan access by institutions like banks.
“83 percent of Kenyans work in the informal sector, and yet they are the most excluded from formal credit yet they are the ones who make the economic wheel turn,” said Vimal Shah.
According to the Kenya National Bureau of Statistics, the informal sector employs more than 83 percent of Kenya’s working population. Despite the tremendous potential in the industry, there has been a delayed adoption of technology, with the majority of Kenyan enterprises still performing most HR operations manually, despite the worldwide drive to digitalization.
Additionally, the Kenya Public Policy Research and Analysis (KIPPRA), estimates that 7.4 million SMEs in Kenya are failing to manage human resources. “As an employer, you have to look at the welfare of employees. – Business Insider Africa
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