Dubai: The remittance and financial services group Al Ansari will extend salary advance options to clients through a venture with the fintech Halan. This allows for timely advances for the UAE’s underbanked and unbanked residents.
The collaboration will also offer ‘send now, pay later’ services to clients.
A handful of UAE’s leading financial institutions have either entered the salary advance space or are on the verge of doing so. This offers customers access to a certain percentage of their salary as a short-term advance that needs to be paid off within that set time.
The concept is extremely popular in the US and Western economies, but has not had much of a scale in the UAE. That clearly is changing.
A salary advance fosters ‘greater financial flexibility and reducing reliance on high-interest credit options’.
The partnership with Halan ‘creates a seamless, secure, and accessible offerings tailored to meet the diverse needs of the UAE’s workforce’.
“By pioneering ‘earned wage access’ services, we are providing a practical – and ethical – solution to support the financial well-being of our customers, especially those who have limited access to traditional banking services,” said Mohammad Bitar, Deputy Group CEO of Al Ansari Financial Services.
Expand user base
While Al Ansari is the market leader in the UAE’s remittance space, the new venture gives it an opportunity to widen its services – and also build on its already substantial client base. “There is significant potential for Al Ansari through the salary advance feature, and we reckon it opens up a niche revenue stream for the company medium-term,” said an analyst.
“There is already sizeable competition in the remittance space, and Al Ansari already has the dominant share in UAE. Growing that would be tough, but a new financial service to a sizeable portion of its clientele can create momentum.”
It could be that other financial services firms, including more UAE banks, will launch their own salary advance program in 2025. And there are specialist fintechs that can provide the platforms to smooth out these processes.
