When Padmini Gupta’s maid asked her for a year’s salary upfront for a family emergency, it sparked an entrepreneurial idea that would help domestic helpers across the UAE.
Ms Gupta is the co-founder of rise, a wealth management platform for low-income migrants and a social enterprise that launched this summer, just 15 months after her helper made the financial request.
The fact her nanny did not have any savings after 15 years of working in the UAE made Ms Gupta realise there was a big problem that needed solving.
“I would have expected her to have some savings from her time here but those earnings had disappeared,” says
Ms Gupta.
“As a business person, you think, well what do I do? Do I give her the money now or do I help figure out a solution to the problem and then help others like her. And that’s how we came up with the work around for Rise – we wanted to help people move up and build a future.”
The former commercial banker joined forces with her husband, Milind Singh, a former strategy consultant, developing the idea for Rise. It is licensed as a payments services provider by the Dubai Economic Department and is able to offer banking services by partnering with Sharjah-based United Arab Bank, which holds the deposits.
But Rise wants to do more than just offer banking services to the 68 per cent of the population it estimates are unbanked in the UAE; it also plans to help domestic workers grow their wealth by offering investment channels, insurance and lending options.
“We would like to see anyone earning below Dh5,000 – that does not currently have access to financial services – banked and then also have them build their assets. We want them to move up and grow their wealth,” says Ms Gupta.
With the average maid earning just Dh1,850 a month – a figure revealed in Rise’s Nanny Salary Survey – Ms Gupta says many have no idea what is happening to their money once they have sent it home.
“They are are hoping for the best,” says Ms Gupta, adding that their money should not be left to a relation to handle, as it often ends up disappearing. “Our idea was to let the person earning the money control what happens. That way, they can build a retirement fund for themselves and control how it is passed to the next generation.”
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According to Rise’s study, 95 per cent of the nannies polled do not have bank accounts, while less than 1 per cent believe they have saved enough to retire in five years.
More than one in four (43 per cent) of the respondents carry some form of debt either locally in the UAE or in their home countries.
The study also found that the average time maids in the Philippines need to work in the UAE to have enough savings for retirement is 18 years.
As well as growing their wealth, the company also aims to help nannies grow their careers by offering over 20 digital courses that the maids or their employers can buy to improve their skills.
“Everyone hits a band when it comes to a certain job position and that job needs to advance them further or they continue to stagnate in their income level – so we would like to see social mobility,” says Ms Gupta.
The courses include tips on nanny skills from picking healthy foods for children to how to create a learning environment, potty training, child safety and discipline. They cost between Dh50 to Dh250 and can be accessed via an app, so that the nannies can learn at home.
“They are affordable and while it’s generally the employers that buy them, the great thing is that the nannies often want to pay for it themselves,” says Ms Gupta. “Not everyone is educated in the job role in which they are put and you build those skills – you will get a much better employee and you improve performance.”
Rasheda Khatun Khan, a wealth and wellness planner, says providing better access to financial services is a great thing for the domestic worker segment.
“This gives domestic workers the tools and skills to really build wealth in the most efficient way. They can learn how to save, how to protect and most importantly how to budget,” she says. “Most nannies send all their money back home, then when they need money themselves they have none and request for advances or loans.”
This is another area Rise hopes to fill. As well as basic financial services, it plans to offer insurance options – such as typhoon insurance to protect homes in high-risk areas – as well as secured and unsecured lending.
This is a big move for the low-income segment, which due to lack of access to traditional banking channels, often turns to loan sharks for finance.
Mr Singh says the financing options will include car loans and mortgages as well as personal loans – with competitive rates offered via their financial partners.
Ms Khatun Khan says such lending should only be carried out for valid reasons with the borrowers fully assessed.
“Many of these nannies have never had this lending power, so when it’s given, without education, we are simply creating an open door to getting into the cycle of debt,” she warns.
However Mr Singh says the company has no intention of trapping low earners in a debt cycle.
“That’s the antithesis of what we are trying to do – we are trying to help them get financial independence,” he says. “At the moment people don’t have bank account access, so if they are getting loans they are borrowing from loan sharks or friends. In the near future we will be the only provider of credit for this segment of society.”
The company is currently closing its first funding round, which includes a significant amount from the London-based investment manager, Astra Amco. Rise declined to reveal the amount.
Anish Mathur, the chief investment officer at Astra Amco, says Rise is an “exciting opportunity” for them as it supports “a silent section of our society”. It is the company’s first UAE investment, though it has made other investments in the Mena region.
“Migration is a dominant theme of the 21st century – one in seven people in this world are migrants – internal or international and we believe Rise can provide unique solutions to migrant growth challenges,” says Mr Mathur.
He adds that traditional financial services industries are not appropriately equipped to deal with migrants as they often require local credit history and very few institutions provide cross-border financial products.
Astra Amco hopes to "provide significant lending capital to Rise's consumers", says Mr Mathur. "In addition we intend to help Rise leverage our capital market expertise and build financial products that are suitable for the needs of migrant consumers that incumbent financial institutions have failed to deliver. One such example is a secured loan issued in the migrant's home country for the purchase of an asset against their ability to repay through their income in the host country."
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However, Rise does have competition. Other fintech initiatives targeting the low-income segment include the Dubai-based Now Money, which offers banking services and allows users to pay bills, top up the credit on their smartphone, track their transaction history and have access to direct remittance options.
Philip Bahoshy, the chief executive of the online start-up community Magnitt, says venture investors look for companies that are scalable, solve a problem and that can be monetised effectively, which is why fintech solutions in the unbanked and mass market space are becoming increasingly appealing with the right solution.
“We have seen investment this year of US$1.5 million in Now Money, $750,000 in Democrance (micro-insurance lending) and now Rise,” he says. “These products are not only applicable for Mena but scalable to Africa, Asia and other neighbouring regions.
“All such propositions become appealing exit options for banks, financial institutions and global international competitors looking to make strategic investments or mergers and acquisitions and hence we anticipate this sector to continue to grow.”
This is good news for the Rise founders, who have a clear idea on their own scalability. While their initial target market is domestic workers in the UAE, they have plans to widen the business.
“We will take the same value proposition – as a platform for educating yourself and building up your knowledge and as a platform for building your wealth – and take it through to different services sectors to education, hotels and retail,” says Ms Gupta, adding that the company plans to expand across the region.
For now though the focus is the UAE.
“If you think about having a stake in the remittances here, that’s big business. Remittances from the UAE to India and the Philippines – it’s something like $30 billion,” says Ms Gupta.
“The bank accounts will just take some of the money that is currently being remitted and put it into storage. There are about 750,000 maids in the UAE, so if we just scale in that sector, even 10 per cent is a big number to have.”
To sign up for an account, the maid and her employer must download the app and register for a bank account for the employee.
Documents such as an Emirates ID, an employment contract and a passport are required as well as a filled-in form. The maid then meets the Rise team in person for the details to be verified.
Costs include Dh149 to sign up for the account and then a monthly maintenance fee of Dh15. The account comes with a debit card.
While Dh15 is a monthly cost that could eat into the maid’s savings, Ms Gupta says other elements will be offered to add value.
"Dh15 is less than the price of a metro ticket," she says. "Isn't it safer to have your money where you can see it than across the waves where you are not quite sure what is happening with it? I think the answer is yes."