Looking After The Overall Wellness Of Gig Workers
KarmaLife offers Earned Wage Access — a financial product that gives people access to a portion of their salaries any time before payday
In our fast-paced world, the need for striking financial balance has never been more important. However, what feels like a crucial necessity for the common man is still a far-fetched luxury for the gig working sector. Assessing the stringent and fixed requirements at formal financial institutions as a pain point for gig workers, we envisioned a platform catering to low-income users who have no credit scores, bank statements, or employment contracts. Consequently, KarmaLife was founded in March 2020, with the aim to aid the financial wellbeing of gig workers. KarmaLife is a fintech platform that caters to financially underserved populations such as gig workers, contractors, self-employed individuals, entrepreneurs, etc
Current Situation of the Gig Workforce
Presently, 47 per cent of gig work lies in medium-skilled jobs, about 22 per cent in high-skilled jobs, and about 31 per cent in low-skilled jobs. These figures indicate the stakes and the importance of the financial wellbeing of the gig working community in the Indian economy. KarmaLife works towards ensuring the financial security of this community as an investment in a more progressive and prosperous future for the gig economy. Research by BCG shows that participation in the gig economy is higher by a spike of 5-12 per cent in developing countries, as opposed to 1-4 per cent in developed economies. Most of these jobs are classified under lower-income job types like deliveries, ridesharing, microtasks, care, and wellness. These studies further estimate that in 2020-21, 77 lakh (7.7 million) workers were engaged in the gig economy and the gig workforce is expected to expand to 2.35 crore (23.5 million) workers by 2029-30.
These findings highlight the market’s dependence on gig workers and the community’s potential to create greater livelihood opportunities for lower-income workers. A recent study by KarmaLife further confirms that despite making up 85 per cent of the Indian workforce, gig workers in India have irregular cash flows, and any sudden expenditure can upset their stability.
With 71 per cent of constrained earners being primary breadwinners in the family, they spend most of their income on loan repayments and other basic household expenses. Moreover, not having easy access to financial products further lowers their cause. The gig economy also suffers from rampant irregularity regarding payouts, with regular payment delays, deferment of salaries, unforeseen cuts, etc. With banks unable to help gig workers due to their constraints, this user base lies at bay regarding financial support.
Financial Provisions for Gig Workers
Borrowing from the Indian cultural philosophy of Karma, which determines the future based on present actions, KarmaLife uses data points to understand and underwrite gig workers based on their current behaviour and not their financial histories. This also goes down well with the company’s tech-driven approach instead of a transaction-driven one. KarmaLife offers Earned Wage Access (EWA) — a financial product that gives people access to a portion of their salaries any time before payday. It focuses on providing a small credit in the present based on future earnings. Hence, KarmaLife not only helps gig workers with access to financial products more easily but also more responsibly.
KarmaLife’s primary business revenue model generator is earnings/wages-linked credit, and other small, short-term credit products to resolve the “month-end” crisis for the sector. This allows users to borrow money during medical and other unforeseen emergencies more easily. The company also extends services to users through partnerships with employers and aggregators of gig workers with its plug-and-play platform, which integrates with most HR management systems in minimal set-up time. With the mission of fixing the financial instability of the Indian blue-collar workforce, KarmaLife is rendering relief in the form of instant cash/ credit. Besides upholding financial instability it will also enable gig workers to upscale financial wellbeing by enhancing their credit scores and providing easier loan opportunities.
KarmaLife’s Vision for the Future of the Gig Economy
KarmaLife is currently working on providing a sustainable future for the gig economy. Striving to explore the untapped potential in the Indian gig economy, KarmaLife is a pioneer in the gig economy sector. It is urging Indian corporates, start-ups, and the government to identify this sector as a market sector. We at KarmaLife feel that this is a great time for insurance companies to foray into the gig economy sector. With rampant cases of diseases caused due to pollution, unhygienic areas, stress, drinking, etc, the gig economy could clearly benefit from financial tools like insurance. Policies designed specially to cater to this user base could have the power to provide a safer and more secure work environment for gig workers, keeping them away from unforeseen financial upheavals. With the recognition of this massive user and its pain points, KarmaLife shares the enthusiasm of all benefactors working towards the holistic growth of the gig economy and believes in preparing for its inevitable onset.
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