Financial inclusion
for digital platform workers

As the number of people working on digital platforms grows, so does the need to reach them with useful financial services (COPY)

Photo: Jeanette Thomas

Photo: Jeanette Thomas

Platform work is on the rise globally, including in emerging markets

Every year, more and more low-income workers in emerging markets are finding opportunities to earn more income on a growing array of platforms — digital marketplaces that connect buyers and sellers of goods and services.

Platform workers sell a wide array of services — from ride-hailing to freelance marketing services — while platform sellers offer goods — sometimes via e-commerce sites, other times through social media platforms. It is difficult to pinpoint the number of platform workers and sellers worldwide, as platforms do not always report these figures. However, the World Economic Forum estimates that there are tens of millions of service providers registered on location-based platforms and 70 million on remote-work platforms.

Outside of Europe and the United States, the growth of platforms has been especially pronounced in Asia. In Africa and Latin America, it is at a more nascent stage but growing rapidly.

Could platforms become vehicles for financial inclusion?

Digital financial services like payments, savings, credit, and insurance could potentially help platform workers and sellers to overcome challenges associated with platform work, grow their businesses, and increase their incomes. But most workers and sellers in emerging markets have long been financially underserved or excluded.

Platform workers and sellers generally come from the informal economy. Offline workers in the informal economy generate little data and are often difficult for financial services providers to reach with credit and other services. Once on platforms, these workers' digital activities generate troves of data that providers can use responsibly to design and embed financial services — right into the platforms that workers are using every day.

Designing useful financial services for platform workers and sellers must start with an understanding of workers and their experiences. To deepen the financial inclusion community's understanding of this fast-growing segment of low-income workers, CGAP in 2021 interviewed and surveyed hundreds of platform workers and sellers across five countries with burgeoning platform ecosystems: India, Indonesia, Kenya, Nigeria, and South Africa.

So who are platform workers?

Most platform workers and sellers in emerging markets come from low-income communities. They tend to be men, and most have some level of college education. They are digitally savvy enough to engage in platform work. CGAP's research across five countries shows that, despite platform workers' and sellers' relatively high levels of education and digital literacy, most workers have limited experience using formal financial services and often rely on informal services.

Corroborating existing research on platform workers, CGAP finds that platform workers value many aspects of platform work, especially its flexibility, clear definition of work, and timely payments. For some women, the flexibility of platform work is especially helpful in balancing their home and work lives.

“We decide our timeslots when we want to work. We can take care of our family and other personal things. Time flexibility is most important.”
U.P., beautician in India

But workers also face challenges that financial services could help them to overcome. To get started on a platform, workers must be able to purchase tools and skills, and sellers need capital to launch their business. As they establish themselves, they must be able to cover liquidity gaps and emergencies between jobs and sales while investing in skill building. They need to smooth their often volatile incomes, build assets, and plan for the future. Throughout the various stages of platform work, workers and sellers must manage risks such as illness, injury, or income interruption, for which they may not have the benefits afforded by formal employment.

A platform worker’ experience — including the opportunities and challenges they encounter and the ways they could benefit from financial services — depend on the type of work they are doing and what stage they are at in their journey with platform work. This, in turn, is largely determined by a few key factors, including a person’s skillset, access to capital, and gender.

Keep scrolling to meet some of the platform workers and sellers CGAP has spoken with over the past year, as we have tried to better understand the experiences of workers and their demand for financial services.

Gulshan cleans homes via Sukhi Zindagi, a women-led platform that provides home and logistics services in Pakistan. Photo: Saiyna Bashir via Communication for Development Ltd.

Gulshan cleans homes via Sukhi Zindagi, a women-led platform that provides home and logistics services in Pakistan. Photo: Saiyna Bashir via Communication for Development Ltd.

Ibrahim works for Nouites Logistics, a delivery service in Lagos, Nigeria. Photo: Temilade Adelaja via Communication for Development Ltd.

Ibrahim works for Nouites Logistics, a delivery service in Lagos, Nigeria. Photo: Temilade Adelaja via Communication for Development Ltd.

Ride-hailing: Laxmi Jadhav, India

A rickshaw driver who got started with a bank loan and inspired other women to follow in her tracks

Ride-hailing is the most common type of platform work in developing countries, and there tend to be more men in this line of work than women.

Ride-hailing can enable drivers to earn more money than they otherwise would, but few drivers can earn a meaningful income without owning their own vehicle which requires a large up-front investment. Drivers also need cash to cover routine expenses like car maintenance, gas, and toll fees. Some drivers aspire to earn more by building a fleet of vehicles.

At each of these points, financial services like credit and insurance could help platform workers overcome challenges and capture economic opportunities, but they often lack access to these tools. Workers’ income histories could be used to offer them financial services; however, platforms do not usually make these records available to workers, and financial services providers do not always recognize them.

Laxmi Jadhav in India is an exception in the ride-hailing world. When her husband was out of work, she decided to take matters into her own hands and earn money for their family through ride-hailing.

“I was the first woman rickshaw driver. So no one understood how to give me such a license. Big people, district workers had to arrange meetings for it. Can this be done? Can women be given such licenses?”
Laxmi Jadhav

At first it was difficult. But eventually — with a loan from her bank — Laxmi got started. And now she’s training other women how to get into ride-hailing.

Learn more about Laxmi’s story in this video:

Ride Hailing: Bayo Omisakin, Lagos, Nigeria

A ride-hailing driver who works multiple jobs

Bayo Omisakin is a 42-year-old rider for a few different ride-hailing platforms in Lagos. His livelihood strategy is similar to that of many other platform workers, who often combine multiple income sources. Besides riding, he also provides accounting and plumbing services. He also supports his wife's work by driving her to her teaching jobs and grocery delivery business.

Bayo says that until recently platform work has been a "wonderful experience." However, he says that competition among ride-hailing platforms has caused platforms to reduce rates, which means he has to work more to meet his goals. He has tried increasing his earnings by renting his car to another driver when he busy at his other jobs. But at this point, he is thinking about leaving the ride-hailing business.

"You have to work extra hard for you to really meet your demand. I have to pull out because I realize it's taking most of my time."
Bayo Omisakin

Bayo has had bad experiences with lenders charging him exorbitant interest rates. Today, he prefers to rely on family and friends when he needs cash, but he is open to taking a loan if the interest rate is reasonable.

Learn more about Bayo’s story in this video.

E-commerce: Archie Osongo, Kenya

An entrepreneurial children’s clothing merchant who lacks access to credit and insurance

The world of ecommerce is a fast-growing varied space, with some established sellers with physical sales using digital platforms to facilitate business during slow times, especially during the pandemic. But another group of young sellers are digital-first, with most of their business taking off through sales on platforms and social media channels. They are digitally savvy enough to work on multiple platforms and move between ecommerce platforms and social media-based sales. They appreciate easy registrations on ecommerce platforms without the hassles of complex paperwork.

Formal ecommerce platforms may have unpredictable platform commissions, delayed payments and imposition of marketing costs that deplete their earnings. So, some sellers prefer selling on Instagram and Whats-app where customer interaction is direct, without the costs big platforms impose.

Whether on e-commerce or social media platforms, sellers experience more autonomy than workers, but their small size exposes them to risks. For example, their thin margins may not allow them to invest in their education and skillset. Additionally, they may not be able to manage the logistics and costs of a higher-than-usual rate of customer returns. Credit and savings services to help sellers overcome such challenges and grow their businesses would be helpful, but few platforms have experimented with these services.

“I would appreciate financial support, maybe get a loan from a bank that is giving a low interest rate.”
Archie Osongo

In Kenya, Archie Osongo started selling children’s clothes online after she discovered a demand among friends for her kids used clothing. She mostly uses Facebook, Instagram and WhatsApp, though she recently opened up a physical location too. She does not have access to formal credit and relies on informal savings groups called chamas when she does not have enough money for her business or to cover monthly expenses like rent and school fees. 

Learn more about Archie’s story in this video.

Personal/home services: Tendai Mushaike, South Africa

A cleaner working hard for her children’s education

Platform workers provide a wide range of home and personal services. Reflecting the gendered divisions of labor in many societies, women tend to work as beauticians, hair stylists, and home cleaners. Men are concentrated in home services involving repairs and industrial cleaning.

Quality of service is very important in these types of work, so many of the platforms offer training to their workers. This segment of workers would benefit from saving and planning tools that help them set aside part of their regular earnings towards larger goals for them and their families.

“This last [child] should finish up school also. That is my vision now.”
Tendai Mushaike

Tendai Mushaike left her job as a nurse aid and became a home cleaner in South Africa. She works on a platform called SweepSouth to access home-cleaning jobs. Because she consistently provides high-quality service and gets good customer reviews, she is able to command higher fees.

Learn about Tendai’s story in the video below.

E-lancing: Merry Akpabio, Nigeria

A poet turned e-lance writer whose commitment to professional development is paying off

E-lancers are a diverse group of professionals ranging from copywriters to photographers. Compared to other types of platform workers, they often have higher levels of education and skills. They tend to have high levels of digital literacy and access to a personal computer. Competition can be fierce in e-lancing, so e-lancers must invest in their skills and build a portfolio that generates high ratings and attracts a steady stream of clients. To do so, many begin their careers working for free or highly discounted rates, falling back on savings or support from family and friends.

E-lancers tend to be more financially included than other workers. Their education and higher-socio economic status exposes them to greater literacy and knowledge about services that can support them. Many of them already use loans and insurance services and are aware of new fintech services. Most balance offline jobs like teaching or office work with elancing to make ends meet. However, overall, most of them had the financial autonomy to think about their future and plan important financial milestones in their life, and therefore could benefit from savings and wealth-building tools that help them reach their goals.

Merry Akpabio is a 30-year-old content writer in Lagos, Nigeria, whose passion for poetry and writing led her into e-lancing. Merry’s determination to invest in her skills and learn about topics like content optimization has helped her to find more clients online.

“Some of my friends on Facebook are also writers. From there, I got the information that you can actually monetize your passion of writing online.”
Merry Akpabio

Learn more about Merry’s story in the video below.

Embedding financial services into platforms

As these stories suggest, digital financial services could help platform workers to capture gains and cope with the risks of platform work. If designed based on a deep understanding of workers' needs and embedded into platforms, financial services could help workers to invest in their businesses, capture more economic opportunities, and overcome common risks associated with platform work. At the same time, these services could improve workers' satisfaction with platforms and spur more platform activity, benefitting the platforms themselves.

Together with financial services providers, fintechs, and researchers, platforms should experiment with financial services that improve worker engagement, livelihoods, and well-being. CGAP’s research points in a number of promising directions, including:

  • Short-term credit that is responsibly tied to predicted earnings and covers periodic liquidity gaps
  • Loans beyond small credit advances for larger expenses in education and upskilling that are based on scoring of work data
  • Insurance for shocks that incorporates upfront cash payouts for small health or equipment expenses
  • Automated savings features tied to workers' financial goals

Over the coming months, CGAP will be working with platforms and financial services providers to pilot new financial solutions for this small but fast-growing segment of the economy that is transforming livelihoods opportunities for low-income communities. Visit for more information.