Financial inclusion is crucial for promoting inclusive growth and enhancing overall economic development. Over the past decade, there has been a notable shift driven by advancements in technology and innovation.
In recent years, several FinTech startups and mobile payment platforms have emerged as drivers, enabling them to offer basic financial services to a significant number of low-income workers traditionally excluded from the banking system.
One of these startups is myZoi, a digital payroll platform based in the UAE, which focuses on financial inclusion and enhancing financial literacy among those who have limited access to banking services.
Established three years ago during the Covid-19 pandemic, myZoi aims to address the challenges faced by individuals on the margins of the formal financial sector.
While working in Dubai between 2020 and 2021 as Emirates NBD’s head of cash management and correspondent banking, entrepreneur Syed Ali, now CEO of myZoi, met co-founder Christian Buchholz, currently the company’s chief innovation officer.
Mr Buchholz was leading design and innovation at SC Ventures, the FinTech investment arm of Standard Chartered, across various regions.
During a research trip to Bangladesh, Mr Buchholz observed the issue of financial exclusion impacting families of migrant workers employed in regions such as the Middle East.
These families often lacked access to bank accounts, posing challenges for money transfers between them, Mr Ali explains.
“These individuals, who work in the UAE and elsewhere in the Middle East, as well as globally, are truly remarkable.
Despite coming from impoverished backgrounds, they manage to secure employment and support their families back home,” he notes.
Initially conceived under SC Ventures, myZoi was developed to leverage Mr Ali’s extensive experience in banking and financial services across the Middle East, South Asia, and the Asia Pacific.
With initial funding from SC Ventures in early 2021, myZoi, under its holding company Financial Inclusion Technologies headquartered in Abu Dhabi Global Market, began constructing its platform to introduce innovative solutions for underbanked workers.
The founders identified a primary issue: the lack of bank accounts. “How can one plan for financial freedom without basic transaction capabilities that are effective, cost-efficient, and convenient?
Saving money, making investments, and other financial activities become impracticable without this essential tool,” Mr Ali highlights.
The team chose to launch in the UAE due to its unique demographic, where a substantial proportion of the population, being expatriates, either lacks sufficient banking services or has no access at all.
Further research revealed significant market gaps not only for blue-collar migrant workers but also for the companies employing them.
In the UAE, for instance, the wage protection system mandates that salaries below AED 5,000 ($1.36M) must be deposited into a bank account or equivalent.
“While some banks do provide services, they often offer only prepaid card options, limiting access to other banking services and posing challenges for corporations,” Mr Ali adds.
Although some companies in the market offer payroll cards, not all actively promote financial inclusion.
“Competition exists, but the market landscape remains fragmented in terms of meeting customer needs,” Mr Ali remarks.
MyZoi offers a digital wallet via a smartphone app, targeting companies employing blue-collar migrant workers with a B2B2C approach.
“Once a company adopts MyZoi’s services, we can onboard their employees, enabling direct salary deposits into our digital wallet for efficient domestic transactions and cost-effective international money transfers,” explains Mr. Ali.
Financial inclusion ensures access to affordable financial products, a goal supported by the UAE Central Bank’s initiatives to enhance access through digital transformation.
“MyZoi’s strategy involves minimizing intermediaries to reduce costs, leveraging strong relationships with global financial institutions established through its association with Standard Chartered,” Mr. Ali states.
MyZoi holds two UAE Central Bank licenses: one for stored value facilities, allowing digital wallet issuance, and another for retail payment services and card schemes, facilitating payments and transfers.
Currently focusing on payroll and money transfers, MyZoi plans to expand into lending and is exploring partnerships to enhance its market position. After beta testing with nearly 1,000 users, MyZoi is preparing to launch officially, having secured partnerships with several corporations.
Raising $14M in its second funding round from a consortium including SBI and SC Ventures marks a significant milestone, enabling MyZoi to expand across the Gulf and other markets with large populations of blue-collar workers.
“Our ultimate goal is to scale up and positively impact underserved communities as a mission-driven venture,” concludes Mr. Ali.
