Salary advance loans are a type of financing that is given to employees in Kenya before they receive their salaries. This is done to motivate employees to work harder and at the same time, build up savings.
The loan is usually given in the form of a lump sum or a monthly installment. The amount of money given will depend on the employee’s salary and their financial need.
This type of financing is mostly used by companies who want to ensure that their employees are motivated enough to work hard without being distracted by financial difficulties.
The salary advance loans are an effective way of motivating employees in Kenya.
A study by the World Bank found that salary advances can motivate employees to work harder and stay longer with their employers. This is because they have a greater incentive to repay the loan, which will increase their wages and improve their living conditions.
Further, the study found that salary advances also have a positive impact on productivity levels. The employer’s business operations are more efficient and profitable as a result of this improvement in productivity levels.
In Kenya, many companies offer salary advance loans to their employees. These loans are usually given in cash to the employee in exchange for an IOU. The company then takes a percentage of the employee’s salary as repayment for the loan.
The main reason companies offer these loans is to motivate employees and keep them from quitting. They believe that if the employee has money in his or her pocket, they would want to spend it on things like food, transportation and other necessities for daily life instead of quitting their job.