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Banking the unbankable: Rise is on a mission

With over five million people unbanked in the UAE, start-up sees huge potential

Image Credit: Antonin Kélian Kallouche/Gulf News
Milind Singh (left) and Padmini Gupta, both co-founders of Rise at their office in JLT.
Gulf News

Dubai: A majority of the UAE’s 750,000 maids earn less than Dh2,000 per month, according to Rise, a Dubai-based start-up aimed at providing banking facilities to low-income workers.

While this may be a relatively small amount individually, Rise saw the potential for scale.

Collectively, maids in the UAE make $5 billion (Dh18.3 billion) a year. Throughout the region, there are nearly 20 million expats who are currently unbanked. This, Rise’s co-founders say, represents $120 billion in annual salaries, much of which are sent home to countries like India and the Philippines as remittances.

According to Padmini Gupta, the company’s chief executive, this presents a problem.

Domestic workers keep “sending money back home,” said Gupta, “and that money gets spent on things that the family thinks is important, and not necessarily saving it for their future, or her future.”

“They’re not saving for their futures, or helping build for their futures.”

For those earning below Dh5,000 per month in the UAE, most banks simply refuse to offer you services, according to Gupta’s husband, and fellow co-founder, Milind Singh.

By Singh’s estimates, this roughly equates to around five million people in the UAE alone, who are “not touched by several financial entities.”

In response to this, Gupta and Singh spent over a year building a financial services business that would target the millions of low-income domestic workers in the UAE, acquiring the relevant licences and establishing the necessary partnerships.

One of these partnerships was with Sharjah’s United Arab Bank (UAB), which agreed to offer banking services to domestic workers (maids, nannies, cooks, drivers), a narrow sub-section of Rise’s wider market.

Rise provides these individuals with salary accounts with UAB, which means they are paid into their banks each month, as opposed to cash payments. They also receive debit cards, and access to an online banking app.

“These financial services … help them build a better financial future for themselves,” Singh said.

The start-up has since partnered with UAE Exchange as well, promising that it’ll offer remittance services for lower service fees. The partnership is not yet live, Singh said.

Other partnerships

According to the co-founder, Rise has another two partnerships in the works that it is not yet ready to disclose publicly. Gupta and Singh also said they would “definitely” have partnered with another bank by the end of 2018.

“We’re close to launching into other segments by late September, or early October,” Singh said, adding that he hoped to be able to tap a larger portion of the five million unbanked workers soon.

As an indication of interest, the company says it has seen 20,000 unique chats per week on its Facebook artificial intelligence (AI) chatbot, which it uses to register new customers. It added that not all of those chats converted in to registrations, but a portion of them each week did.

In messages reviewed by Gulf News, Facebook was forced to remove the page temporarily due to the volume of inquiries that Rise’s page was receiving.

Citing privacy concerns, the founders decline to say how many users they currently have, how many they are targeting, or how much money they have raised so far.

Singh does say, however, that Rise’s user base is growing 90 per cent month-over-month.

In terms of funding, the start-up is currently in the process of raising a Series A, which will be a mix of equity and debt. The equity portion will come from traditional venture capital (VC) funds, while the debt portion will be provided by Astra Amco, the same London-based hedge fund that financed the Rise’s seed round.

“Where the market is interesting is not actually just on the [banking account] side of the business … but on the ability to underwrite their loans,” Singh said.

He went on to explain that the debt portion of the funding round would be used to underwrite, through banking partners, loans that it would provide to low-income workers.

“The hedge fund has the ability to raise hundreds of millions of dollars in debt, and that’s what it’s going to take to give these people loans,” he added.

Debt cycle

Rise has previously brushed off accusations that offering such loans will simply keep people like domestic helpers in a vicious debt cycle, instead suggesting that they are trying to offer them financial freedom, and rid them of loan sharks or family dependence.

Again, the co-founders declined to say how much money they were aiming to raise in their Series A, only stating that it would be “several million dollars.”

Some of this money will be used to fund Rise’s expansion in to other parts of the region, where it hopes to capture some of that $120 billion salary pot from the Middle East’s unbanked population.

“Even if we’re taking two per cent of this segment, the opportunity and scale is as big as Careem,” said Singh. “I’m trying to give you a sense … think about the ability to leverage this money and do something with it, it’s massive.”

Company profile

Name: Rise
Sector: Banking/Financial technology (Fintech)
Year Founded: 2016
Founders: Padmini Gupta, Milind Singh, Mandeep Singh
Funding: Unknown
Employees: 21

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