Tech in Africa
Johannesburg-based Level Finance is a wellness platform that gives employees a percentage of their earned wages. The fintech solution plans to transform financial services by disrupting the monthly payment cycle. This will help employees meet unexpected emergency expenses and avoiding costly credit products.
According to the 2018 report by Wonga, a short-term lender, there are over 40,000 loan sharking businesses in South Africa. The average amount of loans issued ranges between R500 – R1,000, attracting interest of 30% – 50%. Few loans exceed R5,000.
Founded by Raeesa Gabriels, Level Finance helps eliminate exploitative lenders. It also safeguards employees from credit default when exposed to expensive financial lenders. The platform spares them the risk of overdraft fees, late fee penalties, and high-interest rates.
The money management platform helps employees accumulate wealth through automated savings and payment. During the COVID-19 pandemic, the country is facing immense economic challenges where employees are forced to take pay cuts or contend with more support responsibilities.
Gabriels is a 43-year-old mom who got her inspiration from a troubling incident where her domestic support worker was exploited by a dubious loan shark who took away her ID book when she could not settle her debt on time. She felt the urge to help her and develop a solution for others faced with a similar situation. Gabriels is also one of the few black women operating in this space. Her work earned her a year-long mentorship opportunity with AlphaCode Incubate program, which backs disruptive yet groundbreaking businesses that positively impacts the financial services industry.
Employees can view their daily salary on the platform while retaining the option of saving before it’s time for payment. The same applies to hours worked and the amount earned if their employer has them registered on Level Finance. To remain operational, Level Finance charges a subscription fee anytime the employee accesses the services or plans to make a withdrawal.
“South Africans are generally poor savers and tend to live above their means living with high levels of indebtedness. Level Finance allows workers access to money they have already earned to keep them away from loan sharks. This offering is a welcome solution to a gap in the South African financial services landscape.”
Dominique Collett, head of AlphaCode
As word of Gabriels innovative idea spread around since she joined the incubator, new players running on a similar concept began entering the market. Nevertheless, Gabriels and her teammates remain up to the task.
