Low Credit Scores? High Interest Rates? Earned Wage Access Shows the Way

Tackling hurdles posed by credit scoring & steep interest rates

Over the recent years, a growing number of Indians have been using payday loans to cover regular expenses. A survey by NIRA, a consumer finance company in India, noted over the last year 77% of India’s workforce had to turn to personal and payday loans to ‘make ends meet’. Statistics by the Reserve Bank of India (RBI) for 2019-20 show a 28% growth in the number of Indians taking out such loans.

More recently, owing to these recent pandemic-stricken times, a large percentage of the workforce has faced trouble with liquidity. COVID-19 has magnified a growing issue with the lack of a universal credit scoring system in India, as a larger segment of the population found themselves in need of more informal money lenders.

It is not uncommon for salaried employees to cut back on spending in the second half of the month. A payday loan could help matters but there are more than a few loan sharks out there who are adept at ensuring the inflated interest rates look a lot more appealing than they are. Many Indians have found themselves trapped in a cycle of debt, needing another payday loan not soon after having paid off the last one. They find their credit score slowly deteriorating while lacking the required control over their sources of income to steady the ship.

This is where a service like Refyne’s Earned Wage Access (EWA) can help get things back on the right track. Since EWA is not a loan, there’s no interest to be paid on it. Instead it gives employees instant access to their real-time earned pay. This empowers them to break out of the debt cycle by providing them greater control over their finances. Being able to use their earned wages ensures they’ll have the money to make their payments any time of the month before payday.

With Refyne even those fresh into employment get a fair chance of participating in the formal financial ecosystem. Employees who are just starting out are most likely to burn through their salary in the first half of the month before learning to rein it in. If provided with EWA, these fresh-faced workers would be able to do a lot more in their early years as young adults with their money. They’d have the chance to start building a healthy credit score on the right foot without having to worry about being late on a bill that arrives just a few days before payday. Earned Wage Access is a way for such employees to develop the confidence to increasingly use more sophisticated financial products and meet their goals.

Since EWA only provides access to money that’s been rightfully earned, there’s no reason to worry about credit history or prior debt. Being given the flexibility to access their wages as they’re earned provides a more enriching and fulfilling work experience for employees as well as their employers.

Organisations can extend EWA to their workforce at zero cost, no risk and no payroll changes with Refyne. Get in touch with us to learn more.

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