How Bento, NotchHR, and SeamlessHR are using loans to transform HR SaaS

The way HR is handled in Nigeria has changed a lot. Before, companies mostly used manual methods, like spreadsheets. Now, there are special SaaS programs designed to make HR tasks easier.

In the past, Remita was a popular choice for payroll and HR management, but new startups are offering different solutions. Companies like Bento, SeamlessHR, and MyXalary now NotchHR, aren’t just providing HR software. They’re also including financial services, especially loans, to make their offerings more helpful and appealing.

This shift in strategy shows how the needs of businesses in Africa are changing. While HR platforms can make managing employees more efficient, adding financial services like loans helps address a major challenge faced by many companies.

(PS: If your employer won’t give you a staff loan, ditch them!)

Let’s take a closer look at what Bento, NotchHR, and SeamlessHR offer. We’ll see how they’re using loans to change the way HR SaaS works in Africa.

Bento Africa blurred the lines between HR and financial services

Bento Africa, originally Verifi in 2016, emerged as a Nigerian response to the struggles African businesses had with inefficient payroll processing.

Co-founded by Ebun Okubanjo and Chidozie Okonkwo, Verifi tackled these challenges head-on, to make payroll and HR tasks easier and faster. But they wanted to do more than that so in 2020, the company rebranded to Bento Africa. The payment platform evolved into a comprehensive financial service provider offering credit solutions specifically designed for employees.

Bento’s reach extends beyond its Nigerian roots to Kenya, Ghana, Rwanda, and Uganda, solidifying its pan-African presence. They also plan to expand to Egypt, South Africa, Tanzania, Angola, and Ethiopia by the end of 2024, showing their commitment to become the go-to solution for payroll and HR across the continent.

Bento has expanded its offerings from core payroll abilities into a comprehensive HR suite. This includes functionalities for job postings, further helping businesses manage all aspects of their employees, from hiring to retirement.

Bento’s platform automates tasks like paying salaries and taxes, significantly reducing administrative burdens for businesses. They are clearly succeeding, with over 900 satisfied clients across Nigeria, including well-known names like Hygeia, Paystack, and Kobo360.

Bento has processed over $40 million in payroll since its inception, which shows how much they’ve helped businesses.

The newest and most interesting thing Bento Africa offers is a loan platform. This lets employees of businesses that use Bento Africa get loans directly. According to Okubanjo, Bento Africa has partnered with 5 banks, and 2 of those banks provide the money for the loans.

Since launching the loan platform, Bento Africa has helped people borrow over ₦1 billion ($2.4 million). These loans are offered at competitive interest rates (between 2-5% per month) and boast a remarkably low default rate of around 1%.

Bento Africa’s loan platform is further strengthened by its integration with Lendsqr, a leading lending platform. This seamless integration is a game-changer, as it provides Bento Africa with a significant advantage when pitching to companies. The promise of offering employee loans is a compelling value proposition that can attract and retain clients.

Featured read: How Lendsqr is using AI to transform its processes

SeamlessHR is funding its own loan program

SeamlessHR is taking a different approach to the HR and financial services market. Unlike Bento Africa, which has partnered with banks for its loan offerings, it is funding its own loan program.

The company claims to have a remarkably low Non-Performing Loan (NPL) rate, indicating a successful lending strategy.

SeamlessHR’s financial performance is impressive. In 2023 alone, it processed over ₦500 billion in payroll for businesses across Africa. The company boasts a customer base of nearly 1,000 medium to large enterprises spread across over 20 African countries.

The company’s customer portfolio is diverse, including major players in banking, financial services, manufacturing, oil & gas, retail, and government sectors. Clients such as Letshego MFB, Ampersand, Maisha Meds, Jibu Africa, Sterling Bank, VFD Group, Coronation, Wema Bank, and PiggyVest show they can attract and retain high-profile customers in the HR and payroll market.

SeamlessHR owes its success to its user-friendly platform and advanced features, which have made it a preferred choice for both startups and established corporations in Nigeria, Kenya, Ghana, Gambia, Rwanda, Uganda, Botswana, and Southern Africa.

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NotchHR is following a similar path

Myxalary, now known as NotchHR, is taking a similar approach to SeamlessHR. Founded by Abiodun Atobatele in 2016, the company began as a free HR software aimed at simplifying HR processes for businesses in Nigeria. 

As the company grew, it realized that businesses needed more than just basic HR features. To meet these changing needs, NotchHR expanded its offerings into a comprehensive HR platform.

Today, NotchHR provides a wide range of features, including managing payroll, finding new hires, helping employees with loans, and tracking leave. These features are specifically designed to address the HR challenges faced by medium to large companies, which typically have more complex HR needs than smaller businesses.

NotchHR has shown impressive growth, and the company is looking to keep expanding its services, especially in the area of financial products. Building a strong system for managing loans (a credit ecosystem) makes sense as a next step for NotchHR.

This would allow them to offer its clients an even wider range of solutions and make them a one-stop shop for everything related to HR Saas and finance.

Featured read: 5 ways in which Lendsqr wants to use AI for lenders

This concept is not entirely new to the global HR tech landscape

While the African market is witnessing a rapid rise in HR platforms integrating financial services, particularly loans, this trend isn’t exclusive to the continent.

Here’s a brief overview of some prominent players that offer HR SaaS with loan integration capabilities:

Keka: A leading Indian HR software company called Keka makes it easy for businesses to offer employee loans and 

advances. Keka lets companies set up their own loan rules, track who gets money, and manage repayments. This helps employees get financial help when they need it, similar to what we’re seeing in Africa.

Kashable: While not as common as in Africa or India, the US market is showing more interest in employee financial wellness. There are companies like Kashable that focus on providing employee loans that are paid back through payroll deductions. These services often connect with existing HR systems, suggesting that similar models could become more popular in the US HR SaaS market.

This is where Lendsqr comes in

Bento Africa’s smart move to partner with Lendsqr creates a powerful lending marketplace within its HR platform. This is a win-win-win for everyone involved.

The one time integration with Lendsqr saves time and effort. This is much easier than making individual deals with each lender.

Employees get better loan deals because partnership with Lendsqr brings more lenders to the table. This competition among lenders drives down interest rates and gives employees more choices.

As more HR platforms like Bento partner with lending marketplaces, the demand for these services will grow. This creates a bigger and better market for lenders.

Featured read: What are lending APIs and how do you get them?

The future of HR SaaS in Nigeria is bright

This teamwork between HR and lending platforms is a game-changer for both industries. By making it easier for employees to get loans, these platforms are helping them with their finances leading to happier and more productive employees.

The future of HR SaaS in Nigeria is bright thanks to innovative companies like Bento, SeamlessHR and NotchHR and the industry is on track for explosive growth.