Innovative financial solutions needed to help South African workers in debt

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Old Mutual’s Humphrey Mkwebu says employees face multi-faceted financial pressures.

Businesses have a duty to develop solutions that tackle prevalent debt and wellness challenges that employees face. So says Humphrey Mkwebu, Old Mutual Corporate’s General Manager: Employee Benefits Solutions.

Humphrey says that financial uncertainties, the lingering aftermath of the Covid-19 tragedy, and a complex regulatory environment present multifaceted challenges to employees.

Speaking at the launch of a transformative suite of wellbeing solutions aimed at being available to their existing clients in South Africa, Humphrey said it is important that financial institutions like Old Mutual be part of improving well-being.

Empowering financial freedom

Many employees today grapple with personal financial challenges that negatively impact their performance and overall wellbeing. Old Mutual’s comprehensive analysis of payslips across industries has revealed startling instances where employees take home only a fraction of their pay due to payroll loans and predatory lending practices.

Right Track aims to break this cycle of financial distress. With just a name, surname, and ID number, Old Mutual, through solutions offered by Empowerfin, initiates a financial diagnostic process to liberate employees from issues such as reckless lending, prescribed loans, illegal garnishees, and overpriced credit life policies.

Humphrey says, “This initiative not only injects cash flow back into employees’ pockets, but also empowers them to make informed decisions regarding their savings and insurance options. In compliance with POPIA regulations, Old Mutual offers essential employer level reporting and insights to inform people strategies.”

Navigating the financial landscape

Smart Salary is designed to prevent employees from prematurely falling into debt traps and accessing their long-term savings. It addresses emergency events, income-expense timing gaps, and limited savings, often eroding financial wellbeing.
Smart Salary provided by PayCurve, allows employees of Old Mutual’s existing corporate clients to access a portion of their earned/accrued salary before the end of the pay cycle. This flexible solution incorporates gamified financial education and controls, offering employees a lifeline to escape the short-term debt cycle.

For a nominal “ATM-type” withdrawal fee, the service is up to 90% cheaper than other credit options. In cases where Right Track may not free up sufficient cash flow, Smart Salary provides a responsible and sustainable alternative, even to accessing two-pot retirement savings funds.

A holistic approach to wellbeing

To combat rising employee burnout, physical inactivity, and mental health issues, Old Mutual enlisted Strove to build a unified solution that addresses physical and psychological wellbeing.

The platform offers various features to motivate employees to establish and maintain healthy lifestyle habits. The Thrive mental health section provides tools to monitor and enhance mental wellbeing while offering resources for those facing crises. The platform seamlessly integrates with smartphones, fitness devices, and activity-tracking apps that employees already use. “In a world where about 52% of all employees are feeling burned out, increased sedentary time and low physical activity drive chronic disease risk, and one in seven working-age adults live with a mental disorder, we offer a unified solution,” Humphrey concludes.

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