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.

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.”

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