For most employees, the last week of the month is the most anticipated. The reason is not far-fetched: they are being rewarded for their hard work during this time. Interestingly, many African workers typically spend their wages repaying payday loans within the first week of being paid. This is due to unforeseen life issues they must have encountered during the month. These problems expose them to loan alternatives with high interest rates, and they often work all month in distress, which affects productivity.
Albert Owusu-Asare and Ameer Shujjah created Cadana in 2021 to help companies delight their employees by providing modern payroll platforms that allow employees to access their earned pay on-demand anytime. The on-demand pay structure is still in its infancy on the continent, and Cadana is one of the startups advocating for its adoption. The startup is keen to accelerate wealth creation for African workers by making their earnings available when they need it. In an interview with Ventures Africa, Albert Owusu-Asare, CEO of Cadana, spoke about the creation of Cadana and how its system works.
Owusu-Asare was born and raised in Ghana, but studied in the United States of America, where he met Ameer Shujjah, who later became his co-founder and CTO at Cadana. His career in the financial sector did not begin with the creation of Cadana. He had worked at Goldman Sachs Group, Inc. – a leading global investment bank in New York. There he helped many banks with their system and contributed to the Apple Card Project – a joint project between Goldman Sachs and Apple. Subsequently, he became the CTO of Esusu, a unified financial management platform that achieved a unicorn feat. Having acquired valuable and commendable expertise through his experiences in the financial sector, he created Cadana. However, his experience was not the only motivation for creating Cadana.
Her sister’s experience as a worker in Ghana spurred the creation of Cadana. As an employee, she experienced many cash flow problems and it was difficult to meet her needs because many expenses were already accumulated before the end of the month in which she had access to her salary. “It was the attention grabber for me. It was just the passion to come home and help push Africa forward,” Owusu-Asare said.
Typically, most workers are only paid at the end of the month. As is the case with Owusu-Asare’s sister, they become cash-strapped and vulnerable to cash flow problems before the end of the month. With Cadana, workers can request part of their salary before the end of the month. Imagine someone who needs money on May 15 to pay their child’s hospital bills but can’t because their salary is paid on the 27th of every month. To meet the unprecedented pressing need, he could borrow from a third party or loan sharks, which is often inadvisable due to high interest rates. But as a Cadana user, he has access to request his salary before the 27th. However, he does not have access to his entire salary, and he can only access a fraction of what it won according to customs policy. Cadana’s system offers employers the ability to set limits on the percentage of salary available to their employees before the end of the month. Asking pay differs from a payday loan or advance because it is simply a portion of the wages earned by workers.
Surprisingly, the way Cadana works benefits all parties involved. Many working people on the mainland do not have access to savings and credit card, so searching for money when they have to deal with unexpected life issues affects them. With a financial alternative like Cadana, we avoid running from pillar to post to meet needs. Today, employers are constantly trying to do better for their employees and make benefits juicy and attractive to talent in a competitive economy. Pay-on-demand with Cadana is a benefit that employers can offer their employees, especially during tough economic times. For example, the African economy is gradually recovering from the pandemic effect, and in a country like Nigeria, double-digit inflation is being fought. Cadana presents a model that can keep workers in these economies afloat in the sea of financial hardship.
Cadana takes advantage of the wide range of services it renders to businesses in addition to the pay-as-you-go service. The platform helps employers manage their worker data, manage contract letter offers, manage payroll in a compliant manner, and automate pensions and taxes through a software-based system. It also charges a fee of just under a dollar for each transaction employees process on the app. Part of the transaction fees go to the various payment providers who help them facilitate the movement of money.
Anywhere in the world, running a business can be demanding, but it’s even more intense in Africa. The continent faces many challenges such as infrastructure deficit, strict government policies, lack of expertise, etc. Cadana has faced its fair share of continent-specific business challenges. “When you go into a payroll system and you can’t pay people in a timely manner, that has repercussions. We need to ensure the resilience of the money movement infrastructure, which means that we need to work with different payment service providers in all the places where we operate. This is a challenge as we are still in the very early days of payments in general on the continent. It can be tedious to add the local nuances, as in the case of Ghana, where mobile money is very important and where you have to integrate into the ecosystem. We spend a lot of time on integration to make sure we’re working with a resilient infrastructure,” Owusu-Asare explained.
Although the pay-on-demand space in Africa is relatively new, Cadana is not the only startup to offer such a service. However, Owusu-Asare maintains that Cadana is the best among his peers. In the payroll and HR space, a company like SeamlessHR offers the same service as Cadana, and in the on-demand salary space, Earnipay is in the same league. “There are people doing payroll, and people are also trying to do the pay-as-you-go model, but we think the best solution is one that combines those two things. We have built a unique payroll infrastructure in two countries and we also offer a series of employee services. What sets us apart is the ability to deliver value to both employer and employee,” he said.
Speaking from the perspective of demand wage as an innovative wage structure in Africa, Owusu-Asare thinks that flexibility is of the utmost importance. Customers are getting used to instant services and consumer behavior is also creeping into the wage structure. “Today you can pick up your phone and order an Uber or order food from Jumia instantly. Consumers are getting used to this idea of having instant services, so why not your salary, which is the most This is what the future of compensation looks like by creating a flexible payment for workers,”
Owusu-Asare believes that the African continent’s greatest asset is not its oil or its gold, but its people. Offering financial services that would make them prosper is a better way to make an impact. He noted that “when employees are successful, they are more productive. They don’t think about finances, so when I think about our impact across Ghana and Nigeria, we are touching the lives of real working class people making them successful. People testify that they clear hospital bills, pay their debts and invest in a timely manner other than the end of the month through our services. These are tangible impacts that we have on life,”
Cadana has made significant progress in the short time of its inception. From Ghana, where it started, it spread to Nigeria – the most populous black nation on the planet. With a massive market of around 400 million employees in sub-Saharan Africa, the possibilities seem limitless. “We’re just excited to keep growing and making an impact, and we’re on a mission to reach as many of those 400 million people. That means we’ll expand to smaller countries in the future, but we’re working on the steps we need to follow in each country so that we can offer the best service when we go there”,
Owusu-Asare hopes Cadana will be a household name in the future, and that’s key to his global ambition to be operational in different parts of the world.