The Financial Services Authority (OJK) warned consumers about 86 unlicensed online lending companies in May. Services offered by such companies are often fraudulent and might involve high fees or predatory debt-collecting methods.

Earned wage access (EWA) start-up Wagely was established in April last year to tackle employee cash flow problems, giving people access to their wages before payday to cover urgent needs.

The Jakarta Post’s Eisya A. Eloksari interviewed Wagely cofounder and CEO Tobias Fischer on July 5 to learn about the company’s plans and how EWA could help employees and employers alike.

Question: What is the reason for establishing Wagely?

Answer: I have seen firsthand that managing cash flow is one of the most pressing issues for low- and middle-income workers in Indonesia. When faced with urgent cash needs, they can borrow from friends or family, [or from banks, but then] they either pay overdraft or late fees.

Workers often take to loan sharks or predatory lending platforms, too, which would overcharge them. It is a very costly, vicious cycle of debt that has a lasting negative impact on employees’ financial well-being, which in turn impacts businesses. So, giving employees the ability to access salary and financial education is much more affordable and sustainable than loans.

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