AN app designed to ease employees’ cash worries in the final days before payday is being trialled in Scotland after winning the support of an ethical investor.

The technology developed by Edinburgh fintech company Karma gives employees access to advances of £300 which they can spend in major retailers such as Tesco, Asda, Morrisons, Waitrose and Amazon, without being charged interest, fees or risking any impact to their credit score.

Workers sign up for the scheme through their employers, with Karam receiving a fee from partner retailers for driving people towards their outlets.

Karma, which is backed by Fortunis Capital, believes the app can reduce reliance of some people on high-interest payday loans to make end meet. It declared its mission is to eliminate unsecured individual debt in the UK, which currently stands at around £340 billion.

Chief executive 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.

“This will end the necessity of people relying on crippling short-term loans for essentials, or to meet unexpected costs, in order to bridge that gap before payday.

“Our completed tests in Scotland have proved to be hugely positive, as has the initial reaction from Scottish agencies and the tech sector.”

Justin Macrae, chief operations officer at Fortunis, said: “Fortunis is built on fundamental core values: we believe in innovation over exploitation. Our investors share the same ethos, the same mission.

“Karma joins the industry-accredited fintech cluster in Edinburgh, where it has found a depth of talent, an open and collaborative environment with the University of Edinburgh’s Bayes Centre and positive reaction from government groups.

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

Ivan McKee, Minister for Trade, Investment and Innovation, 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.”