PaidHR, a Nigerian HR software provider, has seen a remarkable surge in the popularity of its earned wage access (EWA) product, disbursing over ₦150 million to more than 2,000 users in 2024 — a 5,900% increase compared to 2023.
The company launched EWA after recognising that employees wanted access to a portion of their salary before the official payday.
According to co-founder and CEO, Seye Bandele, the primary reasons for this request were essential expenses like healthcare, rent, and emergencies.
In 2024, the top three uses for earned wages were bills, transportation, and rent — highlighting the practical demands that workers face in managing their day-to-day expenses.
In Nigeria, where most employers pay salaries once a month, employees are increasingly demanding more flexible payment options. Earned wage access has emerged as a viable solution to this challenge, providing workers access to wages they've already earned. It also offers an alternative to payday loans, which often come with high interest rates and the risk of falling into debt cycles.
Unlike traditional credit options, EWA allows employees to access their earnings without needing credit checks. This feature makes it a more sustainable option for those looking to manage cash flow between paydays. For employers, offering EWA can lead to increased productivity and improved employee satisfaction, as it helps workers alleviate financial stress.
However, the rise of earned wage access also brings challenges. In Nigeria, financial literacy gaps and concerns about over-reliance on early wage withdrawals are important issues. Some critics argue that without proper financial management, employees may become dependent on accessing wages before payday, which could lead to long-term financial instability.
To address these concerns, providers like PaidHR are introducing safeguards. For instance, PaidHR limits employees to withdrawing no more than 50% of their accrued earnings at any time. Additionally, the company has partnered with a financial education firm to raise awareness and teach employees how to use the service responsibly.
PaidHR’s explosive growth in earned wage access points to a broader shift in how Nigerian employers and employees view financial wellness. With competitors like Notch HR also ramping up awareness, the future of EWA in Nigeria looks promising.
Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
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