Base of the pyramid

Armed with low-cost products for low-paid workers, Gulf companies are discovering they can turn a profit and fight poverty too.

From luxury malls to high-end hotels, business in the GCC has traditionally been built around high-income and big-spending consumers. Not any more. A vanguard of UAE startups is upending this model and scrambling to tap what they view as an underserved and overlooked market: low-paid migrant workers.

Previously pushed aside as lacking purchasing power, the region’s working poor are increasingly regarded as a buoyant growth market – and one receptive to low-cost, quality goods and services.

The benefits are win-win. Not only are low-income workers profiting from newly accessible bank accounts, insurance policies and affordable healthcare, but – with two-thirds of the UAE population on a monthly wage of less than $1,361 – the market potential is vast.

“It’s a huge market and a huge opportunity,” explains Ian Dillon, co-founder of Now Money, a Dubai-based fintech company, whose app offers financial services to workers with incomes at a level that make it hard to open a regular bank account.

“The UAE has around 25 banks and a population of just under 10 million, but all the banks are chasing after the wealthiest customers,” he says. “We’re going after that forgotten remainder.”

Now Money, which has received funding from US, UK, Saudi and UAE investors – including the Dubai International Financial Centre (DIFC) Fintech Fund – launched its services in mid-2109. It provides payroll to large corporates, mainly in the construction, industrial and retail sectors, along with a smartphone app that gives the employees an online bank account with a debit and cash card.

Users can also remit money through the app straight from their wages – saving a trip to an exchange house – and buy airtime for their mobile phones.

Unlike the region’s other payroll providers, Now Money does not charge its corporate clients for creating accounts. “This is what makes us different,” Dillon, a former investment banker from the UK, says. “We have to focus on providing an incredible service to the worker, because that’s where we make our money. We have a motivation that our competitors do not.”

Now Money’s business model of providing financial services to a previously unbanked sector is “on the dot”, according to Xavier Gregory Layre, CEO of iPay Holding, which runs 44 retail franchises for Dubai telecoms provider DU.

iPay Holding, a subsidiary of the Inteltec Group, has directly invested in Now Money and Layre also uses the platform to pay his 300-strong UAE-based workforce.

“They are really filling a gap and resolving a pain point,” he explains. “It works particularly well for me in retail because as well as paying my staff their monthly wages, I’m also able to award them their commission on a day-to-day basis. This has had a huge impact on their motivation, and subsequently on sales.”

In late-2020, Now Money announced a partnership agreement with Commercial Bank of Dubai (CBD) to provide accounts and cards to the bank's new and existing low-income customers. This will significantly expand the Now Money’s client reach, propelling it into the mainstream, and it will open up banking services to many more low-paid workers.

The next step, says Dillon, is expansion into Saudi Arabia and other GCC markets.


Nearly two-thirds of the UAE population earns less than $1,361 a month.

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Platforms like Now Money are giving low-income workers access to mainstream financial services.

Rise is another player in this space. The firm markets financial services to low-income migrant workers, who find it hard to get a bank account due to their monthly income falling below the minimum salary requirements of most banks.

Launched in 2018, Rise, is a platform with a smartphone app that gives access to bank accounts with the Commercial Bank of Dubai, insurance policies from AXA, and remittance services. Users can also tap into financial literacy and savings plans.

Founder Padmini Gupta, who previously worked in corporate banking in the US, says she had the idea for Rise after her own helper asked for a year’s worth of salary to be paid in advance because of a crisis at home.

“I realised that there were all these people who had been working hard all their lives and sending money home every month, but they had no savings,” she recalls. “I wanted to give people a way to actually build wealth over time by supporting them with simple financial products.”

At the time of writing the company has close to 200,000 customers, and has moved on from its initial client base of nannies and domestic workers, to encompass the wider spectrum of all lower-income migrants.

It has since branched out to launch an online marketplace, in partnership with Carrefour in the UAE, and HomeShopping Pakistan, that gives users the ability to pay for electronic goods, such as phones, in affordable instalments.

Last year, Rise also unveiled plans for Xare, a new mobile app to give users the ability to share access to bank accounts and cut out high remittance fees.

Investors like what they see. In 2020, the company scored a seven-digit funding boost from Middle East Venture Partners, on top of separate investment from the DIFC Fintech Fund.

For Padmini, the investor interest is exciting, but her goal remains to open up financial access for migrant workers.

“We have testimonials from clients to say they have accumulated thousands of dirhams and they’ve surprised even themselves,” Padmini says. “They are hugely grateful and that makes me feel good because I know we are making an impact. 

“We are for profit, but we also have the ability to touch the lives of millions and millions of people.”

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The lives Rise is able to touch stretch far beyond the UAE, because for every migrant working in the country, there is a family back home.

In 2019, UAE-based migrant workers sent $45m of earnings to their families back home, in countries ranging from India and the Philippines, to Nepal, Egypt, and Sri Lanka. 

This money grants access to health services and education and gives migrants the hope of a better future for their children. But if the money stops – for example if the worker is injured and unable to work – the family back home is left in the lurch.

Alert to this gap, the International Fund for Agricultural Development, a UN agency, tasked Luxembourg-based nonprofit Appui au Développement Autonome (ADA) with finding a commercially viable way to insure migrant workers and their families.

ADA turned to Democrance, a UAE firm that provides technology interfaces for insurance providers. In 2019, it launched a pilot offering low-cost life and disability insurance for UAE workers using two remittance platforms, Rise and Hello Paisa, based in South Africa.

“If something unexpected happens, the insurance provides a layer of cash that families can rely on, instead of them being immediately dragged back into poverty.”

Michele Grosso, CEO co-founder of Democrance.

For as little as AED7 ($1.90) a month, users can purchase a policy, provided by AXA, that would provide a payout of up to $6,800. In the case of disability, the worker receives the money, but should that worker die overseas, their remittance recipient automatically gets the payout, offering instant financial support when it is most needed.

“The idea,” explains Michele Grosso, CEO and co-founder of Democrance, “is that if something unexpected happens, the insurance provides a layer of cash that families can rely on, instead of them being immediately dragged back into poverty.

“In the case of migrant workers, who tend to support large families back home, they are extremely aware of the risk of something happening to them," he adds. "But few know how to mitigate that risk.”

Marvin Lutaaya, 27, came from Uganda to work as a commis chef in Dubai in 2015. He uses Hello Paisa to remit money back home and this year also signed up for personal accident insurance.

“The funds that I send back home are paying for my sister’s education, I also have a sick mum and my dad is getting old so it’s all on me to support them,” the hotel management graduate says. “I took the insurance policy to give them extra protection. Especially now with the pandemic, no-one knows what will happen. But the fact that I have insurance means I’m at ease and life can move on.”

Digitising insurance makes it much cheaper and opens it up to market segments that previously could not afford policies, or even knew that such protection existed, explains Grosso. Most crucially, the sheer size of the market means there is the scalability needed for profit and sustainability.

“Let’s not forget, insurance companies are not making a lot of money on each policy because the values are so low,” Grosso says. “But when numbers grow, then it becomes a business opportunity.”

Democrance has to date signed up around 20,000 low-paid UAE customers on its pilot. Grosso admits that the deleterious effect of Covid-19 on remittance flows had dampened take-up, but says numbers are recovering. New partnerships and expansion are also in the pipeline.

“No-one had linked insurance to remittances before, so it was a white board for us to work on,” he says. “It’s about closing the protection gap and creating accessible financial products to form an ecosystem that supports financial inclusion.”

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Behind many migrants workers is a family back home reliant on remittances. Photos: Panos.


The value of remittances sent to family members by UAE workers in 2019.

Also looking to use business to fill an unmet social need is Abhishek Sharma. The CEO of Foundation Holdings, a health and education investment company, he is passionate about proving that “you don’t have to trade returns for impact”.

“With such a large portion of the UAE’s population being on such low wages, this is where the investment opportunities are,” he says, outlining his company’s motivation to create Right Health, a countrywide chain of low-cost health clinics.

According to Sharma, even with the UAE’s mandatory health insurance scheme, many low-paid workers struggle to access care and will neglect their health in order to save cash.

“There are so many horror stories,” he says, recalling the story of a worker with severe toothache. “He went to a dentist, but his insurance didn’t cover the treatment, and when he was asked to pay AED100 ($27) he decided against it. The next day, he was forced to pull out his own tooth to stop the pain. This is not acceptable.”

Right Health, which was formed in 2018, now has 100 doctors across 58 clinics, located primarily close to labour camps and worker accommodation. With a no-frills approach, partly modelled on low-cost healthcare chains in India, Right Health offers consultations to both insured and uninsured patients from as little as AED25 ($6.80).

“Historically, the word impact has been associated with nonprofits, or seen as the responsibility of philanthropy and government,” Sharma explains. “We are trying to change the conversation and show that you can deliver impact at scale and make a profit.”

To create Right Health, Foundation Holding bought up existing low-cost clinics, bringing them together under one umbrella brand, as well as opening up new ones in strategic locations.

To grow the business, shareholders committed $150m for both acquisition and expansion, and Sharma says there is still “a big war chest” remaining for further growth. The next step, all being well, is to move into Saudi Arabia.

‘Given the current economic situation, no one wants to overpay for healthcare,” Sharma said. “But it’s well documented that better quality primary healthcare translates into a healthier and more engaged workforce. That's a return on investment for everyone.” – PA