Ugandan startup Zofi Cash has raised $1 million in its latest capital-raising round to extend salary advance services to more than 20,000 employees in Uganda.
The two-year-old startup raised the funding from Nigerian investors Advancly, and it is purely debt. In Uganda, as in many countries, salaried employees often face unexpected financial emergencies that require immediate attention.
Traditional monthly salary payment schedules can create challenges when dealing with unforeseen circumstances. With Zofi Cash, founded by Paul Kirungi and Gordon Turibamwe, partners with an employer. This helps them to provide salary advance loans to the employees on behalf of the employer.
A typical transaction begins with the employee making a request for a salary advance in the Zofi Cash app. The request must be approved by the employer, and after this, Zofi Cash will instantly reimburse the money to the employee’s mobile money or bank account depending on their preference.
So far, Zofi Cash has partnered with 1,500 employers who have 20,000 employees. Of these employees, Zofi Cash has been able to serve just about 15 per cent of them. The funding will help the startup company to serve anywhere between 50 per cent and 60 per cent of the employees that have now been on the waiting list for close to two months.
The entire funding round was financed by Advancly. Advancly is a financing company with a presence in six African countries that aims to bridge the gap by reimagining access to credit for MSMEs in Africa and emerging markets through capital, data and technology. Zofi Cash will be their first investment in a Ugandan startup.