In Tanzania, if you work in the formal sector, your job probably has health insurance. Unfortunately, only about 7% of the population falls into that category. Pretty much everyone else is either a farmer or has a job in the informal sector, perhaps getting paid off the books and definitely not being covered by health insurance.
That’s according to Lilian Makoi, a social entrepreneur and data analyst who decided to find a way for all those people to afford insurance. About four years ago, she founded EdgePoint Digital, a company aimed at providing such a product through a mobile-based system she named Jamii Africa.
She’s also one of the more than 140 impact entrepreneur scholarship winners at SOCAP, the impact investing conference happening this week in San Francisco.
How does it work? Customers pay a premium—the cheapest is $3 for three months—via the Jamii platform and the company takes 22% as an administrative fee. That premium covers $30 of medical services. (For some perspective, an outpatient test typically costs about $5). When the system approves a claim, the insurer pays the hospital via the app.
Makoi’s interest in insurance started after the death of a friend, who was in a car crash and unable to afford medical help. “It spurred me on to do research into how many people from the informal sector had a high risk of death because they couldn’t pay for care,” she says. She learned that the costs for insurance companies to cover anyone making less than $100 a month were prohibitively high.
Makoi had worked overseeing a mobile money product for a telecommunications company. Through her job, she got a good look at the growth of such systems in East Africa. And she saw the potential for the technology to cut administrative costs and boost efficiency through a platform that could do everything from premium collection to claims processing and payout.
After developing a prototype, Makoi convinced an insurer to test it out. That company also gave her access to a network of hospitals, the better to create a cashless system through which they would be paid directly. Then, she pitched the product to a telecommunications company, proposing they do co-branding, a key to winning customers’ trust.
With that, Makoi launched two pilots. For the first one, she got about $30,000 worth of technical support from the Bill & Melinda Gates Foundation. She also took part in the Barclays Accelerator Powered by Techstars in Cape Town, Seedstars and XL Africa, a program run by the World Bank. Last year, through USAID and venture capital and angel investors, she also raised about $750,000.
So far, the platform is available in four regions in Tanzania–Makoi is raising money to expand to the rest of the country–and in Kenya. To date, she’s activated about 45,000 subscribers and sold 8,000 policies. Customers first have to subscribe and get qualified before they can buy a policy.
See original article here.