‘A tap away’: The new way insurance works in Africa

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For most families, small businesses, and communities in emerging markets, recovering from adverse shocks is one of the biggest challenges. But new technologies are dramatically changing the way people can protect themselves from rainy days.  Emerging insurtech models are innovating to make insurance more affordable, accessible and appropriate for customers with varying incomes and risk mitigation needs.

From 6 insurtechs in 2000 to over 202 insurtech initiatives today, Africa has seen a tremendous growth of insurance providers using technology (insurtechs) to provide cover and security to meet the growing demands in the continent. The potential of insurtechs to reach underserved populations via technology and new business models is unmatched. 

Partnerships are the heart of emerging business models. From digital platforms as distribution rails to P2P insurance wherein users pool risk and demand-based insurance which provides personalized cover triggered by real-time and just-in-time needs. 

In South Africa, startups like Click2Sure, Pineapple, and Simply are paving the way, yet, insurtech companies remain only 6% of all fintech companies in the continent.  How can insurtech become “a tap away” for all underserved populations? 

Catalyst Fund, BFA’s inclusive fintech accelerator program, in partnership with CENFRI will share insights on these emerging business models in Africa and explore why Africa is the space to watch for tomorrow’s insurance products and business models.

PROGRAM OVERVIEW:

12:30- 1:00 PM : Registration and lunch

1:15-1:25 PM : Opening remarks by BFA; lunch 

1:25-1:40 : Presentation on the landscape of insurtechs’ business models by CENFRI 

1:45-2:15 PM : Panel Discussion with leading insurtech startups and investors*

2:30-3:15 PM : Group activity to uncover the next big thing for insurtech in South Africa and new  Investment Areas

3:15-3:30 PM : Open forum

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Event Details:

Date: September 6, 2019

Time: 12:30 pm to 3:00 pm

Venue: Workshop 17, Watershed, Cape Town

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Meet the Speakers

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Lessons About Leveraging Inclusive Fintech for Impact

Photo Credits- PayGo Energy

Photo Credits- PayGo Energy

After three years working to accelerate 25 early-stage inclusive fintech startups in emerging markets, we reflect on what we learned and bring to you an evaluation of Catalyst Fund. Since we started, we continuously learned from our successes and mistakes, and refined our approach to be the best accelerator partner to fintech companies. This report highlights the program's successes and shortcomings, while providing actionable insights into what works and what doesn’t to spur fintech innovation that reaches underserved communities.

Whether you’re an investor, a donor, a startup or another accelerator program, you will find valuable lessons and a data-driven approach that can help us all better support entrepreneurs around the world.

Banks use fintech to make up for lost time on financial inclusion

Picture Credits: FT

Picture Credits: FT

JPMorgan Chase has joined up with the Bill & Melinda Gates Foundation and specialist financial inclusion consultancy BFA to create the Catalyst Fund. It provides early-stage capital and other support across emerging markets to help “impact-oriented fintechs get to scale”, says Colleen Briggs, JPMorgan’s head of community innovation and corporate responsibility.

“We’re seeing a tonne of funding going into fintech but we’re not necessarily seeing that those are focused on low-income [clients],” Ms Briggs says. “That to me is the market opportunity and the gap.” Since 2015 the Catalyst Fund has worked with 20 start-ups, 12 of which are in Africa. JPMorgan focuses on companies that can make a meaningful impact on the financial health of their local populations. Read more..

Assessing the Accelerator Landscape & Catalyst Fund’s Model

While at the CEO Forum and Fintech for Inclusion Global Summit by Accion Venture Lab, Quona Capital and FMO in The Hague, we will be leading a customer trust workshop for the attendees, and sponsoring the Summit Day afternoon cocktail.

At the same time, we will also be launching the Catalyst Fund Report, "Accelerating Early-stage Inclusive Fintech Startups In Emerging Markets: Assessing the Landscape & Catalyst Fund’s Model," authored by Caren Holzman of Enabling Outcomes and Maelis Carraro of BFA, Catalyst Fund. The report examines different accelerator models and lays out about the pros and cons of various approaches within the ecosystem, to evaluate Catalyst Fund’s model.


main conclusions

  1. The number of acceleration programs focused primarily on inclusive fintech in emerging markets is relatively small. There is an opportunity for more programs to focus on enabling fintech solutions targeting low-income populations, given its potential for impact across markets.

  2. What sets programs apart is the mix of services and methods used to accelerate companies, which can include capacity building and hands-on technical assistance as well as access to valuable resources, partners, networks, and investors. However, determining the appropriate and most cost-effective mix and methods that deliver value for the entrepreneur is a challenge. The jury is still out to determine the perfect “secret sauce” that yields the best results and value for money for fintech entrepreneurs.

  3. There is little public information available about the details of fintech acceleration programs that can help startups and funders navigate and choose the offerings better. Programs should be more explicit about what they are offering, under what conditions, and for whom their acceleration services are best suited.

Considering Catalyst Fund in this context, we concluded:

  1. A key strength of Catalyst Fund is its close relationship with investors. Relying on a select network of fintech investors to source startups and connecting entrepreneurs with a broader circle of investors throughout the program improves a startup’s chance of finding follow-on investment.

  2. Catalyst Fund’s tailored and hands-on technical assistance delivered by fintech and emerging market experts is unique and helps ventures focus on the proof points they need to be on a solid path to growth. Furthermore, Catalyst Fund’s commitment to impact ensures that companies build strong value propositions that are accessible, affordable and appropriate for underserved customers in emerging markets.

  3. Catalyst Fund’s willingness to share its tools and learning from the portfolio companies benefits the sector and highlights gaps and opportunities to spur innovation for financial inclusion.

  4. There are opportunities to improve Catalyst Fund’s mentoring program by leveraging industry experts as well as by engaging more effectively with alumni startups to build local networks in their respective markets.

  5. It is important that Catalyst Fund considers new models aimed at achieving sustainability while maintaining its independence and focus on inclusive fintech.

Overall, accelerator programs should be more forthcoming in sharing results and lessons learned with others, as well as sharing best practices and tools for entrepreneurs. This openness can nurture a stronger global support ecosystem for startup innovators and attract more philanthropic and investment capital to the inclusive fintech sector.

Global Growth, Local Impact - Fintech and Financial Inclusion

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In this episode of The Finance Frontier, host Eric Hathaway speaks with Maelis Carraro, program manager of Catalyst Fund. Their lively discussion focuses on how fintech companies are using innovative approaches to address the financial needs of billions of unbanked and underbanked consumers. From advancing payment technology to creating platforms that let lenders and farmers calculate the value of rural agriculture, fintech innovation is helping to meet the needs of the world’s poorest and most financially excluded.

Listen to podcast and view full transcript here.



Six Steps to an Intelligent AI Strategy: The AI Readiness Toolkit

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Are you a startup seeking to prepare yourself for artificial intelligence (AI), but don’t yet have a concrete strategy in place? Perhaps you are a well-established data-centric organization that wants to assess return on investment and areas of strength and weakness. Or you are an investor looking for a way to quantitatively assess your portfolio. Catalyst Fund’s new AI Readiness Toolkit can help you.

BFA is determined to de-hype AI and bring it into practical terms so that more startups can benefit from its power. To this end, we have developed the AI Readiness Toolkit to guide startups to approaching AI in a systematic way. This toolkit builds on BFA’s “AI: Practical Superpowers” Report, which gives startups a high-level readiness framework to orient on the step to take towards “Practical AI”.

Continue reading here.


WEBINAR: Three proven strategies for making fintech inclusive

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BFA’s fintech accelerator, Catalyst Fund, has new lessons to share about how #inclusivefintech companies are broadening and deepening #financialinclusion in emerging markets. We have been working with 20 global startups and accelerating their ability to offer more affordable, better-designed and time-saving products and services. Directed at the financial inclusion community, donors, and investors, we invite you to our webinar to learn about how our companies are doing business differently - changing the paradigm for serving low-income customers and succeeding in emerging markets.

Join us for a webinar as we discuss more on November 14, 2018 at 9 AM EST.


Join The Next Frontier of Fintech VC (During SOCAP 2018)

Catalyst Fund, Cathay Innovation, 500 Startups, and Orange SV invite you to a special gathering for pioneering investors in emerging market fintech. Come meet leading investors and high impact entrepreneurs building fintech solutions in the world’s fastest growing markets.

Agenda:

6:30- 7:00 PM- Panel discussion on "The Next Frontier of Fintech Investing - The Emerging Market Opportunity”,  moderated by David del Ser.

Panelists:

Alex Lazarow: Alex is a Director with Cathay Innovation, a global venture capital firm based in San Francisco. Cathay Innovation was founded around the conviction that empowering digital entrepreneurs with a global platform can help them accomplish their vision. He is also a Kauffman Fellow, earned an MBA from Harvard Business School and is a Chartered Financial Analyst (CFA) charterholder. He has a bachelor of commerce in international business and finance from the University of Manitoba. He is a Term Member with the Council on Foreign Relations.

Sheel Mohnot: Sheel is a Managing Partner at 500 FinTech. His own startup experience includes 2 successful FinTech exits – a payments company and a high-stakes auction company. He formerly worked as a financial services consultant at BCG and started his FinTech career at the non-profit p2p lender Kiva. Sheel holds an MBA from the University of Michigan and a BS from Carnegie Mellon.

Moses Choi- Moses Choi is a seasoned investor and financial services professional and has executed over $15Bn in capital markets and principal investment transactions. He currently leads strategy, product innovation, and deal sourcing in support of Orange’s financial services and mobile money business units. Prior to joining Orange, Moses was Vice President at Morgan Stanley, where he focused on cross-asset origination and represented the firm on the ICMA’s Green Bond Principles Executive Committee. He is a contributor to the World Economic Forum and holds a master’s degree from the Fletcher School at Tufts University and a BS and BA from Cornell University

7:00- 7:15 PM-   Catalyst Fund CEOs will share what they're building to expand the inclusion and financial health of low income customers in emerging markets.

7:15- 8:30 PM- Stay for cocktails and some fun  networking with investors, industry experts and entrepreneurs.

If you’re an investor or a donor and are interested in attending, then reach out to akasera@bfaglobal.com


Inclusive Fintech Happy Hour with Catalyst Fund, Accion Venture Lab & Quona Capital (during SOCAP18)

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Join us for another Inclusive Fintech Happy Hour hosted by BFA's Catalyst Fund, Accion Venture Lab and Quona Capital. After the success of last year's event, we bring together again the ecosystem actors in inclusive fintech and financial inclusion - innovators, funders, and influencers - for a night of creative exchanges during SOCAP 2018 at The Dorian, San Francisco from 6 PM- 8 PM.

Network and share a few drinks with investors, entrepreneurs, industry partners, and like-minded peers, advancing impact through financial products and services for emerging markets around the world. Don't miss out, RSVP today.



Proven Strategies for Making Fintech Inclusive

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Catalyst Fund seeks to uncover how inclusive fntech companies are creating new and superior value propositions, and to determine whether they are driving financial inclusion deeper and further. We work with early-stage fintech companies that span the globe and push the boundaries of innovation in sectors as diverse as lending, agriculture and insurance. Run by BFA, Catalyst Fund provides fintech innovators with grant funding and tailored technical assistance to complement their skill sets. In turn, the startups help us learn about how to advance financial inclusion among low-income populations in the markets where they operate.

We are examining how deep can Inclusive Fintechs get into their markets? Explore our proven strategies for reaching low-income customers: will they continue to be owners of these enhanced value propositions? And can they continue to maintain and improve offerings as they scale?

Read and download the brief here

Finance's helping hand: making refugees self sufficient

(Source: The Banker)

(Source: The Banker)

"The world's refugee camps are often home to displaced entrepreneurs who set up small enterprises, driving the business case for financial services. But getting providers to take notice is a tough call, exacerbated by problems of access and identity, James King reports."

Through its investments and global partnerships, the Omidyar Network is tackling one of the biggest obstacles around refugee IDs – that of interoperability. In essence, this is the difficulty facing a refugee or migrant when every service provider or agency they encounter requires a different form of identification. Developing a foundational and interoperable form of ID would enable refugees to access a far wider suite of services and opportunities. But to achieve this, regional and global co-operation from various stakeholders is needed.

“We want governance structures that allow the interoperability and portability of digital IDs across multiple markets,” says Ms Anderson. “There are a variety of stakeholders working to address somewhat different aspects of a similar problem but often in silos. Identity is an issue that needs to be solved at scale. For this to happen, actors must work in a more collaborative and consensus-building way,” she adds.

Reaching this endpoint will take time and will demand an effective intersection between technology and regulation. In the meantime, other private sector actors are looking at the steps that can be taken on the ground. Increasingly, issues of refugee financing are attracting the attention of fintechs and start-ups who have been sold on the business case. Leaf Global Fintech, a Nashville-based business, is a case in point.

Co-founded by Nat Robinson and Tori Samples, both of whom had prior experience working with refugees in Africa and the US, Leaf aims to address the refugee challenge virtually. The company, which is focusing on Rwanda and the Democratic Republic of the Congo, partners with local banks and mobile money operators to ensure the safe passage of funds for a refugee crossing the border between two jurisdictions. It achieves this by using blockchain technology. 

Ms Samples says: “There’s a lot of hype around blockchain. We are using it to facilitate cross-border transfers rather than storing any value on it.”  For example, a user in the Democratic Republic of the Congo can open an account with Leaf via SMS, cross the border to Rwanda and receive their savings through a partner institution. In doing so, the company is addressing one of the key impediments facing mobile money networks in the region.

“Mobile phone penetration across east Africa is high. Mobile money accounts are growing much faster than bank accounts. That’s also an avenue that we are looking to tap into. But the issue with mobile money is that it doesn’t cross borders. The issue with that is that it’s offered through national telcos,” says Mr Robinson.

Continue reading here

(Leaf is a #CF20 company and is an integrated financial services provider whose mobile platform enables the conversion of physical to digital fiat currency through blockchain technology. Refugees deposit cash at a mobile money agent in their home country and then send that money into a Leaf account. The company stores the transaction on the blockchain and works in partnership with regional banks to safeguard currency.)

Meet the Five Startups Shaping the Future of Inclusive Fintech in Emerging Markets

Through Innovations in e-Commerce, Blockchain, Mobile Money Integrations, and Agrifintech

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At Catalyst Fund, we have been working with a wide range of startup companies to bring much-needed essential financial products and services to improve the lives of people on low incomes. We are proud to announce the five latest “inclusive fintech” companies to join Catalyst Fund: BancoMare, Hover, Leaf, payAgri, and Sokowatch. These startups are tackling enormous challenges to bring more accessible, affordable, and appropriate financial services to the 1.7 billion underbanked customers in Africa, India, Brazil, and Southeast Asia.

There has been progress in financial inclusion over the past 5 years, with 515 million people gaining access to a bank or mobile money account, bringing the percent of adults globally with bank to 69 percent. However, too few people on low incomes actually use financial services, and we are yet to see the variety of products that can truly improve the financial health of these customers. We invested in these startups because their solutions can accelerate financial inclusion by: 1) overcoming infrastructure barriers currently limiting mobile money innovation; 2) facilitating partnerships among ecosystem players such as digitizing data for financial service provision; and 3) bringing tailored products to the most vulnerable people through advanced technology.

Read more about these companies here

BFA’S Catalyst Fund Initiative that Accelerates the Future of Fintech in Emerging Markets Reaches 20 “Inclusive Fintech” Companies

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Inclusive Fintech Companies Are Creating and Scaling Solutions to the Widespread Unmet Need for the Full Range of Financial Services In Emerging Markets

New York, July 31, 2018Catalyst Fund has added another 5 “inclusive fintech” companies to its early-stage accelerator, now totaling 20 companies that leverage innovative technologies, in order to deploy financial service solutions in emerging markets where there is enormous pent-up demand. Mobile technology, machine learning, AI, and blockchain are making it possible and profitable to build the full range of financial services for previously underserved populations in places like Africa, India, and Southeast Asia. Catalyst Fund’s highly successful model de-risks companies and gets them investment ready — the 11 companies that sought follow-on funding after completing the program secured an average of $1.3 million each.

“Bank accounts and payment transfers are receiving a lot of attention and are growing in the number of subscribers, but they aren’t being used with the frequency that you’d expect,” said David del Ser, a Director at BFA. “We’re accelerating inclusive fintech companies whose solutions will achieve greater usage and help address the complete financial lives of these populations — there is great need and demand for these kinds of products and services in emerging markets.”

Inclusive Fintech refers to a wider range of modern financial services, beyond bank accounts and digital transfers, that are tailored to the unmet needs of emerging market customers to ensure adoption and to enable users to move up the financial ladder.

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Catalyst Fund, a partnership between BFA, the Bill & Melinda Gates Foundation, JPMorgan Chase & Co., and Rockefeller Philanthropy Advisors, encompasses both B2B and B2C companies that either directly provide inclusive fintech solutions and services, or build the rails for needed technological and financial infrastructure. The five latest portfolio additions are:

●      Hover’s proprietary and patent-pending technology enables mobile developers to turn an existing communications protocol, USSD, into an invisible transport layer, allowing the facilitation of in-app mobile payments so that users who can’t access or afford data plans can still connect to transact.                                                      
Innovation: In-App Mobile Payments                                 Classification: Rails/Infrastructure

●      PayAgri is an agri-fintech startup that brings together key players in the Indian agriculture value chain to facilitate trade and funding flows to low-income farmers who struggle to access funding and establish credit history.                                                                                
Innovation: Digitizing agricultural ecosystem                      Classification: Rails/Infrastructure                                        

●      Banco Mare is a digital bank, serving consumers in one of Rio de Janeiro’s largest favelas, who are excluded from the formal financial system. The mobile app allows users to pay their bills, make peer-to-peer transfers and pay at local merchants, using their own blockchain-based digital currency “Palafita.”
Innovation: Blockchain                                                    Classification: Product/Service 

●      Leaf was founded with the mission of helping refugees transfer their assets across borders safely using blockchain technology.      
Innovation: Blockchain                                                     Classification: Product/Service

●      Sokowatch is an e-commerce platform for African informal retailers that offers on-demand and free delivery of store products and credit lines to address common stockouts, lack of access to working capital and business management tools.
Innovation: Digitizing the informal retailer               Classification: Product/Service

“Consider that just a few years ago there were 2.5 billion unbanked globally and even today, 3.8 billion people still do not have access to insurance — we haven’t begun to scratch the surface of the need for financial services among this demographic,” said Maelis Carraro, Catalyst Fund Program Manager and Senior Associate, BFA. “But pre-seed capital is a challenge here just as anywhere else, that’s why our model is set up in a way that de-risks the investment so that we can get these companies to market where they can have the greatest impact.”

The accounts of one-fifth of banked individuals worldwide are inactive. In India 80 percent of the population has a bank account but 48 percent of those accounts haven’t had a transaction in the past year. Another 190 million Indians remain unbanked.

“We are proud to invest in solutions that have the potential to transform the financial lives of people across the world and in technology that is reinventing the global financial services landscape,” said Janis Bowdler, President, JPMorgan Chase Foundation (NYSE: JPM). “We look forward to seeing the impact that the 20 Catalyst Fund companies will make on consumers’ lives.”

Participating Catalyst Fund cohort companies must first be nominated by a sponsoring investor in order to be considered, and a pre-selected group of investors can make follow-on investments once the companies have been de-risked by completing the program. The program draws on BFA’s business intel from 12 years of using finance to create solutions for low-income people in emerging markets. Companies receive flexible grant capital, tailored technical assistance, mentoring by potential investors and access to networks of follow-on investors. A fifth cohort is planned for later in 2018.

About BFA

BFA is a global consulting firm specializing in using finance to create solutions for low-income people. Our approach is to seek out, create and implement financial solutions to help people manage challenges and seize opportunities. We partner with cutting-edge organizations that touch the lives of low-income consumers such as financial institutions, fintech companies and information providers. In creating solutions, we integrate our deep expertise in customer insights, business strategy, new technology, and growth-enabling policy and regulation. Founded in 2006, BFA’s clients include financial institutions, technology companies, donors, investors and policymakers. BFA has offices in Nairobi, Delhi, Boston, Medellín and New York. For more information, please visit: www.bfaglobal.com.

About Catalyst Fund

Catalyst Fund is a philanthropic grant fund at the forefront of Inclusive Fintech, an initiative supported by the Bill & Melinda Gates Foundation and JPMorgan Chase & Co. Since 2016, as a project managed by BFA and fiscally sponsored by Rockefeller Philanthropy Advisors, Catalyst Fund has been accelerating startups developing financial services for the needs of the low-income demographic. We also seek to build up industry knowledge and customized tools from our direct work supporting and accelerating that early-stage startups building digital financial services for the next billion.

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Media Contact:

nicole.Shore@zerotosixtycommunications.com                                         
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