Over 80% of Kenyans in gig economy want instant payments after jobs – report

Mastercard has released a white paper revealing how gig work across East Africa is helping to drive economic growth by facilitating economic opportunities, improving livelihoods, and acting as a buffer against unemployment.

However, for the gig economy – which is based on short-term, temporary and flexible independent contractors – to reach its potential and unlock prosperity for millions of people, the digital divide must be bridged through connected devices that power the digital economy, and value adds like access to capital and access to market.

Mastercard’s white paper, titled The Gig Economy in East Africa: A Gateway to the Financial Mainstream, explores how digital inclusion is a prime enabler of the gig economy. Connected devices, which are already proven to be vehicles of inclusion and development in Africa, can help gig workers overcome some of the biggest challenges they face, ultimately driving financial inclusion and leading to improved economic possibilities.

The paper, based on research from in-depth face-to-face interviews with gig workers in Kenya, shows that the gig economy is nascent, buoyant, and continues to grow, with almost two-thirds (60%) of gig workers joining the gig economy between 2017 and 2019. However, like much of the informal sector, uncertainty is a fact of life, with the biggest challenges being around continuity of income. More than half (55%) said that not knowing when the next gig is contributes to instability. And close to 60% of respondents said that fluctuation in income from week to week is a cause for frustration.

Currently, the online gig economy (the portion of gig work that is attained through digital platforms) is a tiny portion of the overall gig economy. Research-based estimates in 2019 put the total size of the online gig economy in Kenya at $109 million, employing 36,573, while the offline gig economy comprises 5.1 million workers, and accounts for $19.6 billion.

Despite this, online gig economy work is preferred; Mastercard’s report found that almost 60% would prefer online gigs to offline. This is because online gig work enables end-to-end management of projects. A third (over 35%) said that finding gig work was easier on a platform, and about 30% said platforms made faster payments possible, and helped them connect to other workers.

“Gig work is present everywhere in East Africa, but now, with the growth of digital technologies and connected devices, there is a real opportunity to help gig workers quickly connect to consumers to meet their demands for services, and overcome significant pain points such as inconsistent work, financial planning challenges and late payments. If each key player in the gig economy ecosystem comes together – from the platform, to the mobile industry and the payments provider – we can ensure that the end-to-end journey of the gig worker is both smooth and profitable, and realize the true potential of inclusive, sustainable growth across the continent,” said Jorn Lambert, Chief Digital Officer, Mastercard.

Some of the most common types of gig work in East Africa are in artisanal and general services, which includes welders, electricians, carpenters, and domestic work. “Independence” is the powerful motivator behind this movement. Being self-employed with the freedom to work at an individual pace are part of why gig work is growing.  It is an inclusive space where people of different social and economic backgrounds can fit in and earn a living.

The Gig Disconnect

With the digital economy as an enabler of greater prosperity and inclusion, gig platforms have proven to be a single touchpoint for many services and opportunities utilized by gig workers. But access to gig work opportunities is often not enough to keep a gig worker afloat. Loans, instant payments, and benefits such as insurance, are the top three perks desired by gig workers in Kenya, and 45% of respondents said they are willing to pay between $1 and $5 a month for such ben­efits and services.

Over 80% of respondents in Mastercard’s research said instant payments when a job is finished is the most desired feature of a gig platform. And in step with the prevalent mobile money system, about two-thirds (62%) of respondents said they prefer to receive payment through mobile money such as MPESA or Airtel Money because it is readily available, reliable, easy to manage, secure, and convenient. However, there are still barriers to internet access that need to be over­come to realize the massive opportunity that the East Africa region represents. One is the slower speed of internet data in Africa compared to other continents.

“Traditional platforms often do not adequately serve the needs of the gig worker, who is at risk from personal accident and injury, loss in revenue from any absence from work, incomplete delivery or payments, and economic volatility. However, connected devices are bridging divides between urban and rural, rich and poor, and connecting gig workers to peers, information, opportunities and services. But what’s equally as critical is establishing a digital identity for gig workers across platforms. There are various gig platforms currently being utilized, but it is difficult for a single platform to provide the value and benefits that workers require, such as easy collection of payments via digital channels, and access to credit, training and insurance, particularly as they tend to move from one platform to another. A collaborative approach is called for to not just create jobs, but also a gig-worker identity that provide benefits, ensuring decent working conditions and improved livelihoods,” said Ngozi Megwa, Senior VP, Digital Partnerships, Mastercard for Africa and Middle East.


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