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How SmartAdvance Boosts Employee Financial Wellness

October 25, 2021

Covid-19 has impacted the way that many employers approach employee wellbeing. Businesses have started to reconsider the importance they place on the financial wellbeing of their employees after the significant financial strain they have been placed under for the past year and a half. Financial wellbeing programs are no longer an added benefit but a necessity for an engaged and productive workforce. 

To put this is context, 89% of employees in South Africa are concerned about their ability to pay their bills. Additionally, 80% of employees are unable to make it to the end of the month. The level of stress these places employees under is monumental and minimizes their ability to prioritise anything other than survival. Ultimately this results in 20% of employee absenteeism being a result of financial stress. Figures like these severely decrease company revenue because of the decline in overall productivity. 

Not having a financial wellness program means as an employer you are spending a significant portion of your workday on time consuming admin. Worse, it means employees do not have access to financial protection and insurance which prevents them from becoming over-indebted and going to unreliable credit providers. Ultimately what this leads to is a workforce that is snowed under by financial stress which adversely affects their productivity. 

Partnering with a financial wellness provider such as SmartAdvance helps you oversee the entire employee wellness journey which includes everything from payroll services to developmental credit.

SmartAdvance provides a holistic employee wellness solution:

Payroll services

Finclusion has recently announced the acquisition of a strategic stake in HelloHR, a South African payroll software startup. What this means for SmartAdvance clients is that they now have access to a holistic financial wellness product. This acquisition grants SmartAdvance clients access to payroll services which includes the automation of the necessary leave and tax adjustments. Meaning that clients save time and reduce the chance of human error.

Wage streaming

This allows employees to access to a small portion of their earned wages at an earlier date. This gives employees a responsible alternative to taking out a loan from a unreliable lender by giving them the more the option of access to their own wages at an affordable flat rate.

Rehabilitation loans

Give employees the opportunity to improve their credit rating by giving them access to rehabilitation loans. They have the option of getting a loan of up to R50 000 over 36 months so that they can improve credit rating and improve monthly savings.

Developmental credit

Your employees have access to developmental credit which helps them build, expand or improve low-cost housing, thereby helping them improve the community in which they find themselves. 

Behind the Scenes

Making all of this possible is the amazing SmartAdvance team that is supported by the Country Head, Gerrie Fourie.

Gerrie spent almost 10 years starting and managing various finance companies throughout Africa. He started his journey with the Finclusion Group in June 2020, ultimately taking on the role of SmartAdvance Country Head in April 2020.

He was brought in to oversee the successful implementation and managing of all SmartAdvance operations. 

Currently he is tasked with aligning the SmartAdvance strategy with that of the Finclusion Group. This strategy alignment is vital as they have recently received funding and now the responsibility is on him to deploy it and guarantee it is dispersed to the necessary departments.

“Business development is a top priority, because we cannot afford to not move forward. Just because we are successful today does not guarantee it tomorrow.”

Forward momentum is also driven by strategic partnerships, which Gerrie helps forge and nurture. 

“If you want to increase your expertise and resources, create predictable revenue streams and provide incremental lift to sales and revenue, all while keeping acquisition costs down then your ability to solidify strategic partnerships is priceless.”

Day-to-day he is responsible for SmartAdvance’s staff management and reporting. Staff management is a lot easier as face-to-face communication is possible once again as more employees are returning to the office as lockdown regulations are eased.

He is trying to ease the transition back to the office by aligning company culture with the long-term goals of employees and SmartAdvance. He has also busy with tech enhancements which will greatly benefit the success of his employees.

If you are ready to looking after the wellbeing of your employees, get in touch with us to discuss partnering with SmartAdvance.

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Setting an Education Fund for Your Child

October 1, 2021

With the rising costs of education, investing for your children’s education is no longer a luxury but rather a necessity.

A 2016 report from City Press calculated that education for your child starting from Grade R to matriculation at an average fee-paying school would cost you approximately R253 000, and former Model-C schools costing around R676 000.

Fortunately, there are various saving options for parents which are listed below:

Fundisa

If you can only afford small amounts but still want to save for education, this investment tool is a good option.

This is an education savings plan by the government, the National Student Financial Aid Scheme and the Association for Savings and Investment South Africa. This type of savings plan has the benefit of a top-up bonus annually as a reward. This can be as much as 25% of the amount saved per year.

The minimum contribution is R40 per month, and there is no maximum. However, Fundisa is designed for lower-income earners. Only families that earn less than R180 000 per year qualify.

Tax-free Savings Account

A tax-free savings account can be opened up in the name of your child. There is an annual limit of R30 000 and a lifetime limit of R500 000.

You will accumulate R500 000 by the time they are 16 if you start contributing from when they are born. With the power of compound interest, a relatively modest start-up investment should be more than enough to cover the cost of your child’s education.

Policies

If you are scared that you might be tempted to use some of the money that you are saving for your child’s education, consider taking out a policy

Most education plans that are on offer are generally endowment policies. This means that a monthly payment is made for a specified period and a lump sum is paid out at the end of the period. It is important to note that the minimum investment term is generally 5 years. 

There are education saving endowment policies from various South African finance institutions, eg. Momentum. Monthly contributions can start as low as R150. Be sure to select a package that will cover your monthly contributions in the event of permanent disability or death. It could also be beneficial to select a plan that is able to give you a payment holiday if you are under financial strain for a couple of months. 

Unit Trusts

Most experts view unit trusts as the best way to save towards a child’s tuition fees. The long term returns on unit trusts are consistently higher than returns on cash savings and usually also better than those on educational policies.

A unit trust has a better chance of outperforming South African inflation rates than typical bank savings account. Also, a significant amount of your interest from your unit trust is exempt from tax.

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How to Stay on Top of Your Finances

October 1, 2021

Studies show that some people are more concerned about money than their own physical health. For most us this worry stems from a fear over losing our jobs, not having a savings account that you can fall back on and not having money for retirement.

But there are ways that we can get on top of our financial worries – here are some helpful tips:

Understand your spending habits

Knowing when you are spending and on what is an important part of preparing for stressful financial situations. You don’t need fancy apps to do this, your own mobile banking app can give you this information.

Analyse which payments are being processed, perhaps there are subscriptions that you can cancel. If not, assess all purchases that you have made, you’ll be surprised by how many you’ve forgotten about.

Next, decide where you can improve next month by reducing unnecessary purchases. Lastly, set aside disposable income that you are allowed to use to buy the items you want but don’t need (and don’t go beyond that budget!).

Protect your family

Worrying about what could happen to your family if something happened to you and your earning capability, is a horrible feeling. It’s important to know that your family is protected financially should something like this happen.

Insurance policies that payout in situations like these to provide protection and some comfort to you.

Make a ‘money worries appointment’

Worrying about money is difficult work, so set aside a time that you can go over all financial documentation and create realistic steps towards your money goals.

Make a plan for what you want to cover during this ‘appointment’. Once you’ve done it, stop thinking about money as much as possible until your next ‘appointment’ rather than letting it spoil your days.

Create an emergency fund

We know we’ve spoken about this specific tip many times before and this certainly won’t be the last time, this is because of how important it is.

You can never know when unexpected expenses are going to arise and these expenses could potentially derail your finances completely. To stop bad luck derailing your budget, try to put together a fund for emergencies. Try to put aside enough cash for 6 months of expenditure. 

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Financial Well-Being in the Workplace

October 1, 2021

Money concerns is not a topic that employees like to discuss at work, so it may not be apparent to an employer when their employees experience financial distress.

Employers can take the time and effort to identify when money concerns affect their employees, so that they can offer resources to help.

Signs of Financial Distress

Even though employees seldomly disclose when they are in financial distress, below are signs that could indicate that an employee could use assistance:

  • Requesting an advance on a paycheck
  • Being mentally distracted during work
  • Spending more time on phone calls
  • Showing up late or other attendance issues
  • Avoiding social occasions with co-workers, such as going out to lunch
  • Choosing not to participate in a retirement plan

Four Elements of Financial Well-Being

Financial well-being comes when people feel secure about their money and that they have the freedom to spend their money how they’d like. Individuals should review their financial well-being from four different perspectives:

1. Feeling In Control of Daily and Monthly Finances

A key aspect to feeling financially secure having enough financial resources to meet your day-to-day and month-to-month expenses. The focus here is on meeting your present expenses. This keeps you in control of your expenses, rather than expenses being in control of you.

2. Capacity To Absorb a Financial Shock

Life is full of unforeseen circumstances and part of your financial well-being is having enough financial resources to absorb the costs of such circumstances. 

With this element the focus of financial well-being shifts from being able to control your present expenses to focusing on the future and emphasizes the ability to cover emergencies. 

Emergencies pose great threat to a person’s financial stability and therefore needs to be adequately planned for.

3. On Track to Meet Financial Goals

Another important aspect of financial well-being is to be on track to meet your financial goals. Achieving financial wellness means you do not derail from the goals and targets that you set for yourself. 

Once you have achieved your short-term goals, like establishing a budget or creating an emergency fund, you should start working toward mid-term financial goals such as, paying off student loans. Lastly you want to concentrate on achieving long-term financial goals such as striving for homeownership or increasing your retirement savings.

You probably won’t make perfect, linear progress toward achieving any of your goals, but the important thing is not to be perfect but to be consistent.

4. Financial Freedom to Make Choices to Enjoy Life

The final aspect of financial well-being is having the freedom to make choices regarding the use of your financial resources to enjoy life. Amanda of Dream beyond Debt, captured this fact by defining financial security as “the ability to spend money on what I want, and not on what’s available or what I can get the lowest price because that’s all I can afford”.

Financial Freedom is about living within your means, being a bit frugal, and making sure that money is spent on things you really need like food, shelter, and even vacations (relaxation is important too).

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Financial Wellness Programs

October 1, 2021

Being aware of the signals when an employee is in financial distress and knowing what the different elements of financial well-being are, is not enough to support your employees.

There are measures that you can put in place to achieve this, namely, creating an employee financial wellness program. This is a program to help employees better manage their finances and reduce financial worries. In any financial wellness program offered to your employees (of all income levels) there are 5 key areas to focus on:

Budgeting and Spending 

Stress the importance to your employees of tracking, spending and planning what you will spend via a budget. It is important for them to remember that their projected and actual spending may not match exactly, but they should have a goal and monitor where their money is going.

Emergency Funds

You can help your employees understand that besides ordinary expenses, there are always emergencies that pop up here and there, some major some small. They should be disciplined in saving for such unexpected events. Recommend to your employees that they should save the equivalent of three to six months of your typical salary.

Financial Counselling

When it comes to buying a car, house, or any major purchase (especially one that requires going into debt), it is wise for your employees to get expert advice. They should preferably get 2 or 3 experienced opinions before making a final decision.

Investment Strategies 

Further, explain to your employees if they already have their day-to-day finances under control and have a sufficient amount of money saved, they can do well by investing any surplus funds. You can offer recommendations on how to invest for instance, it’s best to choose stable, low-risk investments rather than risk a big chunk of your “life savings”. They should look for investments that are almost sure to pay a respectable dividend, even that means waiting longer to receive it.

Improving the financial well-being of your employees’ matters not only because it will decrease employee absenteeism, presenteeism and increase their productivity but also improve the overall quality of life for your employees.

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SmartAdvance implements Tru-Id’s innovative Collect Platform

September 9, 2021

SmartAdvance implements Tru-Id’s innovative Collect Platform

January 2021 saw smartadvance successfully complete the implementation of TruId’s Collect platform that promises to change the way customers interact with nifty, the direct to consumer lending platform

 TruID’s innovative platform enables consumers to safely and rapidly share their banking information with nifty during the loan application process in a manner that not only promises privacy for the consumer but serves to reduce time spent on the loan application process, meaning that customers received their funds even quicker than before.

Nifty, the direct-to-consumer brand of smartadvance, a registered credit provider strives to provide safe, accessible online credit quickly and easily using its innovative technology platform.

“We integrate into anything you’re creating; whether you’re a lender, aggregator, PFM tool or an aspiring fintech, TruID has developed a trusted & secure financial data sharing ecosystem for you, says Paris Valakelis of TruId.

Our ongoing commitment is to be the leading provider of API’s, one that enables financial innovation but also promotes the digital transformation of the financial industry.” Concludes Paris

The Collect Platform emphasises on maximising user adoption by creating a trusted user environment.

“Nifty’s vision is to deliver relevant, accessible financial solutions, safely and easily using innovative technology. Giving our customers the ability to apply for credit quickly is our promise; creating a secure online environment in which they interact with our brand improves customers experience and trust for our users which is what will build our brand for the long term. TruID helps us take another step forward in realising this objective.” Concludes Mark Young, CEO of smartadvance.

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SmartAdvance launches low-cost lending alternative for employee wellness partners

January 19, 2021

Smartadvance, a registered credit provider and online lender recently launched their new wage streaming product which aims to assist employees of their current wellness program with emergency funds at a much lower cost than a personal loan, in a safe and secure environment.

Wage streaming is a service that allows employees to access a portion of their salary owed to them for the month but that has not yet been paid. Employees can access a percentage of their salary paid directly into their personal bank account at any point in the salary cycle, for a low, affordable fixed fee.

Wage streaming has become a more widespread trend as the cost of personal loans have become more expensive to many consumers. Today, there are an estimated 22.5 million credit active users in South Africa, and about 41% of these are considered to be high-risk borrowers, and possibly overindebted, unable to meet monthly commitments.

“Our financial wellness programme, run through smartadvance enables us to assist employees of our payroll partners with the funds they need for everyday emergencies without compromising their financial wellbeing and at a cost of less than 10% of a traditional pay-day loan.” Says Mark Young, CEO of smartadvance South Africa.

Employees can stream their chosen amount with the option to be paid in tranches or in full at a flat fee charged per transaction.

Due to the diversity of consumers within the payroll partners, smartadvance have considered accessibility for their customers making the wage streaming service available via USSD, online or via the smartadvance app.

“We understand and listen to our customer concerns or difficulties which is why we have launched this product. It provides access to affordable emergency finance to a range of consumers that might not have been able to access as cost-effective solution from the mainstream market,” concludes Young.

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SmartAdvance rehabilitation product provides financial relief for low income earners

January 19, 2021

SmartAdvance have introduced a rehabilitation product for our employer partners that will provide much needed financial relief to hundreds of employees.

According to the Debt Counselling Association as of December 2019 approximately 10 million credit consumers were classified as impaired, having an average of 8 loans agreements at a time.

With 44% of households (combined) earning between R1500 – R7000 per month and with a very low discretionary savings level, it is no wonder that families need to resort to credit as a means to survive each month. Although this may assist as a short-term solution, many find themselves unable to meet monthly commitments, often resulting in over indebtedness.

SmartAdvance, the credit provider that helps customers manage their money better identified the problem within one of our key employer partners, finding that the employees had an average of R28 000 worth of debt, struggling to manage their personal financial portfolio.  

It was for this reason that SmartAdvance established a rehabilitation product that would provide financial relief to these employees, reducing the number of debtors, allowing them to pay one lower monthly installment and often saving the customers between R800 – R1000 per month.

“Although the rehabilitation product is newly launched with in the company, we have already seen the positive results with customers that were previously struggling, saving money monthly and managing their debt more efficiently.” Says Mark Young, CEO of SmartAdvance South Africa

A loyal customer of SmartAdvance, after being in debt review and struggling financially for the past 8 years, is finally able to manage his personal finances more efficiently, make it through the month and meet his financial commitments.

“I never thought SmartAdvance could help me with my debt. When they told me about the rehabilitation product, I could not believe it but wanted it to try it. I am truly happy with their service and how they have helped me in the past years. I will always comeback to them when I need help. Thank you SmartAdvance, I am so relieved.” Says Fanisile

SmartAdvance is a registered and regulated credit provider that uses customized credit scoring technology combined with artificial intelligence to not only extend credit to our customers when and where they need it, but strive to help our customers make financially sound decisions for the long term.

“It is our goal to empower consumers to achieve financial health. By providing our clients with educational tools and extending credit responsibly, SmartAdvance aims to enable clients to make financially sound decisions for the long term,” Concludes Young

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SmartAdvance takes responsible lending and client privacy seriously: Microfinanza Rating Social Report

January 19, 2021

Finclusion Group’s SmartAdvance has recently undergone its first Social Rating Assessment by MicrofInanza Rating, which provides independent ratings aiming at enhancing transparency, facilitating investments, and promoting responsible practices of organisations that work to achieve financial inclusion and sustainable development. SmartAdvance earned a BB- rating from the global agency.

This report hailed the business’s client privacy practices as excellent while prevention of over-indebtedness and responsible pricing as adequte, although it highlights that product design has room for improvement. The business’ client complaint channels are also highlighted as being good, as there are multiple channels for clients to air their complaints and it does not necessarily have to be their original point of contact.

The business is on track to realising its goal and vision to deliver personalised financial services safely and easily through technology, with the mission and vision statements having been formalised recently (after the business’s rebrand in February 2021) and implementation is still ongoing. The company’s draft strategic plan includes goals and targets relevant to social performance.

SmartAdvance’s current customer base shows that 60% of its clients are women and the average loan balance per borrower (12%) indicates good outreach to the low-income population segment. ‘The loan products offered have adequate accessibility and flexibility. The need for clients to cope with emergencies is adequately met by the products offered.’, highlights the report.

“As the head of the business, I cannot ignore the impact of the pandemic and subsequent economic shutdowns. We have done our best to keep going and to be responsible for our growth. As the report indicates, there’s an increase in the number of loan seekers, however, we have erred on the side of caution as ours first and foremost, is to have responsible lending practices and to encourage responsible credit to our customers.”, stated Gerrie Fourie, the Head of SmartAdvance

The rating agency has also noted that staff gender balance is adequate, with 56% being women and a further 50% of women holding managerial positions. The company’s geographical coverage is adequate despite having no branch network however, outreach to households with relatively low-income levels is adequate. Staff initial and ongoing training is adequate with transparent and formalized HR policies where growth opportunities are generally well communicated.

Gerrie emphasized that ‘This is the first Social Rating report for the business and we are encouraged. We do not dismiss the recommendations made by MFR, although, we take pride in knowing that our hard work is showing, and although there’s room for improvement, the team can rest assured that their work is impactful to the clients and the market we serve.’

SmartAdvance also offers relevant non-financial services in the form of training and tools that are designed to impart financial management skills to clients. This includes a downloadable budgeting tool on the website, as well as videos and blogs which are easily accessible and uptake has been deemed adequate among active clients.

 

About Finclusion:

Finclusion Group is enhancing financial inclusion in Africa by building transformative financial technology services focused on high-growth market segments, providing world-class customer experiences. Our businesses leverage our credit, risk and technology expertise to grant financial services safely and easily using advanced, proprietary AI algorithms. Our current key focus areas are financial wellness, credit scoring and direct lending, operating through the brands Fractal Labs, smartadvance, niftycredit, niftycover, TrustGro and Click2Pay in South Africa, Eswatini, Kenya, Namibia and Tanzania. More info on www.finclusiongroup.com.

 

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