The Kenyan office of MicroEnsure, a subsidiary of US-based microfinance network Opportunity International, is employing M-Pesa, a mobile money service in Kenya, and FrontlineSMS:Credit, a nonprofit software provider specializing in mobile financial services, to offer microinsurance policies independent of savings and credit groups. Microinsurance is often packaged with other microfinance services to take advantage of existing distribution channels to reduce operation costs. Ms Kate Waiganjo, country manager for MicroEnsure Kenya, explains that the use of mobile technology is expected to make this standalone microinsurance feasible. The model involves using M-Pesa to collect premium payments and FrontlineSMS to monitor individual policies in real time. The product will allow individuals to increase or decrease their levels of coverage as and when needed. MicroEnsure provides insurance services to approximately 3.5 million poor clients in Ghana, India, Bangladesh, Mozambique, Malawi, the Philippines, Tanzania and Kenya as of 2011.
By Nisha Koul, Research Associate
About MicroEnsure: MicroEnsure was founded in 2005 in the UK as a wholly owned subsidiary of Opportunity International, a global nonprofit microfinance network created in 1974. It was known as the Micro Insurance Agency until 2008. As an insurance intermediary, it provides a range of products including health, life, property and weather index-based insurance to approximately 3.5 million poor clients in Ghana, India, Bangladesh, Mozambique, Malawi, the Philippines, Tanzania and Kenya as of 2011.
About M-Pesa: M-Pesa is a Kenyan mobile money service. The “M” stands for “mobile,” and “pesa” means “cash” in Swahili. Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-Pesa was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator. As of March 2011, M-Pesa reports having 13.8 million registered customers, roughly one third of Kenya’s population.
About FrontlineSMS:Credit: FrontlineSMS:Credit is a sister project of the FrontlineSMS project which is a free, open source software program that enables users to send and receive text messages among groups of people through mobile phones. FrontlineSMS:Credit combines the functionality of FrontlineSMS with local mobile payment systems to provide a range of services, from savings and credit to insurance and payroll. FrontlineSMS:Credit was founded in 2009 and was recognized for its approach by the Pop!Tech Social Innovation Fellowship program in 2010.
Sources and Additional Resources:
FrontlineSMS:Credit, “Expanding Microinsurance Penetration,” http://credit.frontlinesms.com/blog/?p=72
MicroCapital.org story, August 8, 2011, “MICROCAPITAL BRIEF: Articles From UK’s The Guardian, Nigeria’s Business Daily Online Praise Potential of Mobile Banking, Microfinance Across Africa,” https://www.microcapital.org/microcapital-brief-articles-from-uk%E2%80%99s-the-guardian-nigeria%E2%80%99s-business-daily-online-praise-potential-of-mobile-banking-microfinance-across-africa/
MicroCapital.org story, April 19, 2011, “MICROCAPITAL BRIEF: Mobile Telecommunications Network (MTN) Ghana, Hollard Insurance, Mobile Financial Services (MFS) Africa, MicroEnsure Pilot “mi-Life” Mobile Money Insurance Product in Ghana,” https://www.microcapital.org/microcapital-brief-mobile-telecommunications-network-mtn-ghana-hollard-insurance-mobile-financial-services-mfs-africa-microensure-pilot-%E2%80%9Cmi-life%E2%80%9D-mobile-money-insurance-product/
MicroCapital.org story, September 28, 2010, “MICROFINANCE PAPER WRAP-UP: Saving Through the Mobile Phone – The Case of M-PESA, by Olga Morawczynski, Published by Microfinance Information Exchange (MIX),” https://www.microcapital.org/microfinance-paper-wrap-up-saving-through-the-mobile-phone-the-case-of-m-pesa-by-olga-morawczynski-published-by-microfinance-information-exchange-mix/
MicroCapital.org story, October 22, 2009, “NEWS WIRE: United Kingdom: FrontlineSMS Allows Microfinance Institutions to Operate Via Mobile Phone,” https://www.microcapital.org/news-wire-united-kingdom-frontlinesms-allows-microfinance-institutions-to-operate-via-mobile-phone/
MicroCapital Universe Profile: MicroEnsure, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroEnsure
MicroCapital Universe Profile: M-Pesa, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Pesa
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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