Nearly 90% of gig workers run out of pay by month’s end: survey

According to a new survey, a large majority of Indian gig workers face frequent wage shortfalls and strongly prefer smaller credit that they can access immediately when needed, regardless of the length of the loan.

The survey, conducted jointly by KarmaLife, a provider of financial solutions for gig and blue-collar workers, and Catalyst Fund, a global accelerator that supports inclusive tech innovators in emerging markets, finds that nearly 90% of gig workers are short on pay. before the end of the month, when major expenses come due, leading to a strong preference for small loans, especially for short repayment terms.

Seven out of 10 gig workers are interested in instant loans, while only 14% of gig workers have a credit card.

The survey also highlighted the day-to-day finances of most digital workers, who spend a significant portion of their income on essential household expenses and work assets. The most frequently cited expenses were household consumables, fuel and mobile phone bills, totaling an average monthly outlay of Rs. 9,000. Loan/EMI repayments and rents also constitute more than Rs. 9,000 and Rs. 6,000 in expenses, respectively, for nearly half of the gig workers.

Less than a quarter reported tuition and remittances as an expense, despite it being a significant expense for those who incurred it.

53% of gig workers support their parents, while 25% support their children. 73% send money home on a regular basis, ranging from once a month to a few times a month. The survey shows that gig workers who only support their parents pay them a large part of their income. 70% of workers who support families usually contribute less than 5,000.

About 52% of gig workers have set aside money as an emergency fund in the past year. The top three reasons to save are medical emergencies, children’s education and a new home. Although loss of income and inability to earn are worries for most construction workers, only about a third have self-purchased insurance, mostly life cover. 80% of construction workers do not have medical insurance.

“Small cash and short cycle cash is a major unmet need for the majority of India’s blue-collar workforce. While lending business models have focused on larger, longer-term loans, if this credit is provided in a sustainable way by linking it to their income patterns, it could allow them to ease their cycles of indebtedness. and become more independent. Moreover, also giving them the opportunity to save small amounts of liquid assets along with relevant microinsurance will go a long way in unlocking their future aspirations without compromising their resilience,” Rohit Rathi, CEO and Co-Founder of KarmaLife.

175 site workers were interviewed for this study.

KarmaLife works with leading digital gig platforms in segments such as ridesharing, food tech, e-commerce, logistics, flexible staffing and others.

Rosalie M. Dehner