A REVOLUTIONARY fintech (financial technology) app aimed at eradicating payday loans has trialled in Scotland with the support of an ethical investor.

Karma allows employees monthly salary advances of £300 with zero interest. The smartphone app has conducted consumer tests with the backing of Fortunis Capital, which specialises in investments that “transform society for the better”.

Employers who sign up to Karma can advance their staff £300 on their salary in order to purchase goods and services at retailers.

The employees pay no interest or fees – and, unlike other lending schemes, using the app may improve their credit rating.

Innovations Minister Ivan McKee has welcomed the app, describing the company as a “fintech seeking to solve a major societal challenge”.

He said: “Scotland has a worldwide reputation for attracting innovative businesses such as Karma and providing them with the opportunity to grow and prosper. 

“It’s a pleasure to welcome Karma here, particularly as a fintech seeking to solve a major societal challenge and make lives better for people in Scotland, and across the globe.”

The company’s mission is to rid the UK of its individual debt problem, which currently stands at £340 billion.

CEO Minck Hermans said: “We have built not just a solution, but are starting a global movement, to disrupt the short-term consumer loan market and eradicate the pain this causes.

“Employers are rewarded with increased productivity and employee engagement, plus the recognition that they are doing the right thing; employees are empowered with more control of their finances; and our retail partners are rewarded with more business. Everyone wins.”

Fortunis chief operating officer, Justin MacRae, said: “We believe in innovation over-exploitation. Our investors share the same ethos, the same mission.

“With Scotland open to attract technological investment in the nation’s social capital, this is the perfect environment for ethical fintech companies to flourish.”