Driving ESG, Gunung Madu Plantations (GMP) Transforms Through Earned Wage Access in Collaboration with Paywatch

Jakarta, August 29, 2024 - Environmental, Social, and Governance (ESG) has become a standard for both national and international companies. This concept emphasizes sustainable development, investment, and business practices and has become a magnet for investors due to the increasing interest in socially and environmentally responsible investments.

In line with this, PT Gunung Madu Plantation (GMP), a pioneer in plantation and sugar mill business in Lampung, is also committed to implementing principles of environmental preservation, social responsibility, and good governance. As an innovative company that cares for its employees, GMP, which operates on approximately 30,000 hectares and employs over 5,000 workers, strives to provide benefits for its employees and their families, as well as the worker community. The company has established community centers, schools, health clinics, recreational facilities, and swimming pools.

Recently, GMP initiated the provision of a new benefit to enhance the relationship between employees and the company by offering services that support financial health, allowing employees to access part of their earned wages before payday.

Unlike other financial services, EWA is not a loan offered by banks or corporate cooperatives. Instead, it is an early payout of wages based on the request of employees, allowing them to meet urgent financial needs.

Aspirations from Employees

After several months of utilizing Paywatch to improve employee welfare, GMP has begun to see a strong impact. One GMP employee working in security has been using Paywatch since the service was introduced by the company. This employee acknowledges the need to prepare for urgent needs before payday. "If there is suddenly a large financial need, my wife and I would take a loan from the bank. But for urgent needs that can be covered by my salary, I find the EWA service from Paywatch useful to minimize borrowing from friends," explained the employee.

Another GMP employee, a foreman, stated that Paywatch has helped smooth his household cash flow during urgent financial needs and also helped restore dignity when needed. "Paywatch helps alleviate my financial problems. As the head of the household, I'm responsible for managing household cash flow and meeting urgent financial needs. Rather than borrowing small amounts from friends, I prefer using EWA. Paywatch is the best solution I've found," he said.

Filling the Gap in Financial Services

Urgent financial needs can arise at any time and can be faced by anyone. This situation often traps families in Indonesia in debt, whether through banks, informal lenders (shadow banking), or online loans (pinjol), which have proliferated over the past five years. This is unavoidable as many people in Indonesia are of sufficient age but remain unbanked. The World Bank noted that in 2021, there were 97.74 million people without bank accounts, or 48% of Indonesia's total population, making Indonesia the fourth-largest country in terms of the unbanked population.

However, the Financial Services Authority (OJK) revealed that Indonesia's financial inclusion rate reached 85%, but this is not accompanied by a corresponding level of literacy, which is relatively low at 49% in 2022. Financial literacy reflects public awareness of financial decision-making, while financial inclusion indicates access to formal financial services. It is no surprise that many cases have arisen from fintech services, particularly illegal online loans. These cases often begin with defaults on loans and have dominated media coverage recently, often leading to depression and even threats to life after harassment or intimidation by debt collectors.

The presence of EWA in Indonesia can help fill the gap in financial services in society, particularly among workers. Instead of borrowing small amounts through illegal online loans, workers in need can utilize EWA, which is more convenient and relatively low-cost. In response to this, Paywatch stated that financial benefits are the most important advantage for employees. Paywatch’s approach is tailored to each business sector, including food and beverage, hospitality, aviation, retail, call centers, construction, and manufacturing.

Leading companies in Malaysia, South Korea, the Philippines, and Indonesia have utilized Paywatch's EWA services. Paywatch hopes to build a sustainable workforce through fair financial access, particularly in Indonesia’s manufacturing industry.

Paywatch has currently provided EWA to major retail companies such as Jaya Grocer, Metrojaya, Bilabila Mart, and Guardian in Malaysia. In Indonesia, Paywatch partners with KB Bank, Wilmar, Kredit Plus, CGV, and several other manufacturing companies.

About Paywatch

Paywatch is a leading Earned Wage Access service provider supported by major financial institutions and recognized for its commitment to improving financial welfare and ESG. We stand as a trusted partner in Asia, collaborating with banks and leading companies in each of our markets to serve as a bridge that helps employees achieve a brighter financial future through safe financial accessibility and flexibility, empowering communities to lead better lives. Paywatch currently operates in Malaysia, South Korea, the Philippines, and Indonesia.