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App offerings to facilitate dependence on payday lenders

An app designed to ease employee cash flow worries in the last days before payday is being tested in Scotland after securing support from an ethical investor.

Technology developed by Edinburgh-based fintech company Karma allows employees to access £ 300 advances they can spend at major retailers such as Tesco, Asda, Morrisons, Waitrose and Amazon, without having to pay from interest, fees or risk having an impact on their credit score.

Workers enroll in the program through their employers, with Karam receiving compensation from partner retailers for driving people to their outlets.

Karma, which is backed by Fortunis Capital, believes the app may reduce some people’s reliance on high-interest payday loans to make ends meet. He said his mission is to wipe out individual unsecured debt in the UK, which currently stands at around £ 340 billion.

Managing Director Minck Hermans said, “We have not only built a solution, but we are starting a global movement, to disrupt the short-term consumer loan market and eradicate the pain it causes.

“Employers are rewarded with increased employee productivity and engagement, as well as the recognition that they are doing the right thing; employees have more control over their finances; and our business partners are rewarded with more business. Everybody wins.

“This will end the need for people to depend on crippling short-term loans for the most part, or face unforeseen costs, in order to close that gap before payday.

“Our completed tests in Scotland have been extremely positive, as has the initial reaction from Scottish agencies and the tech industry. ”

Justin Macrae, Director of Operations at Fortunis, said: “Fortunis is built on core core values: we believe in innovation rather than operations. Our investors share the same philosophy, the same mission.

“Karma joins the industry-accredited fintech cluster in Edinburgh, where he found a depth of talent, an open and collaborative environment with the Bayes Center at the University of Edinburgh and a positive response from government groups.

“With Scotland open to attracting technological investment in the country’s social capital, this is the perfect environment for ethical fintech companies like Karma to flourish. ”

Ivan McKee, Minister for Trade, Investment and Innovation, said: “Scotland has a global reputation for attracting innovative companies like Karma and giving them the opportunity to grow and prosper. It’s a pleasure to welcome Karma here, especially as a fintech looking to solve a major societal challenge and improve the lives of Scots and the world.