Financial services firm Standard Bank Group has extended a R400-million working capital facility structured in a sustainable finance format to South African earned wage access provider Paymenow.

This marks a significant commitment to financial inclusion and the expansion of innovative employee financial wellness solutions across Africa.

The facility will support Paymenow's ambitious expansion plans across strategic African markets by building on its established presence in Namibia, South Africa and Zambia.

Paymenow has identified significant opportunities in additional jurisdictions where traditional financial services have failed to adequately serve the needs of working populations, leaving them vulnerable to predatory lending and perpetual debt cycles, Standard Bank says.

Further, the facility represents a significant endorsement of the earned wage access model, which allows employees to access a portion of their earned wages before traditional payday, providing South African employees with a healthier alternative to unethical lending, while driving financial literacy training through incentivised gamification, the bank says.

The earned wage access financial solution has proven particularly valuable in addressing cash flow challenges faced by millions of workers across Africa, enabling them to meet immediate needs while encouraging better financial habits and building their ability to save.

“This transaction underscores Standard Bank’s support for fintech solutions and new business models.

“In line with our commitment to consistently provide clients with innovative financial solutions, Standard Bank has enabled Paymenow with the interbank faster payment solution PayShap. This faster payment capability ensures that Paymenow is competitive and ahead of the curve with the ever-evolving payments landscape,” the bank states.

“This facility from Standard Bank Group demonstrates that financial institutions recognise the transformative potential of earned wage access and are willing to invest significantly in its growth.

“The funding will enable us to accelerate our expansion across Africa, bringing financial dignity and flexibility to millions more workers who currently struggle with the constraints of monthly pay cycles and resort to expensive credit to bridge gaps in their cash flow,” says Paymenow Group CEO Deon Nobrega.

Additionally, for employers, earned wage access has emerged as a powerful tool for employee retention and productivity, reducing financial stress-related absenteeism and improving overall workforce wellbeing.

The solution requires no changes to existing payroll systems and carries no cost or risk to employers, while delivering measurable improvements in employee satisfaction and engagement, Standard Bank says.

Recent impact studies have demonstrated the positive effect of earned wage access on financial wellness, with users reporting improved ability to manage emergencies, reduced reliance on informal lenders, and increased savings rates, it adds.

“We are proud to partner with a fintech whose mission is to help employees build a better future, promote financial inclusion and educate their customers on how to make better financial decisions.

“This partnership showcases our capability to leverage our regional footprint and innovative digital banking solutions to support fintechs and new business models across the region,” says Standard Bank Corporate and Investment Banking transaction banking sustainable finance head Noloyiso Mpanza.

Paymenow has also been onboarded onto Standard Bank's OneHub platform, which creates opportunities for collaboration and expanded market reach. OneHub is Standard Bank's digital ecosystem.

This integration enables Standard Bank's corporate clients to seamlessly access Paymenow's Financial Wellness Solutions, thereby enabling them to enhance employee satisfaction, reduce financial stress-related absenteeism, and strengthen workforce retention, without any cost or operational burden to their businesses, the bank notes.