Finaclusion

According to World Bank, over 100 million West Africans are poor and unbanked and unable to access quick and affordable plans for micro-insurance, micro-pension and loans.

There is presently no way to record and leverage their cash financial history to compute credit scores in order to access quick loans, Micro-Insurance and health schemes from institutions.

Finaclusion  , a digital sharing platform solves this by aggregating informal groups and their operations. It enable members of informal groups to automatically be issued monthly micro-insurance, micro-pension and loan plans for being financially active in their cooperative groups or credit unions.

Our digital services could be accessed through offline mobile services without internet or through existing mobile money agents using our mobile apps.

If taken globally, about 1 billion lives in Africa and Asia will have 20% reduced mortality rate, 5% income increase, and economic prosperity in over 100,000 rural communities.

Globally, according to World Bank, about 1.7 billion adults the world are unbanked and live on below $ 2 a day, hence they lack access to adequate financial services. Over 100 million and 60 million adults are affected by this same problem in West-Africa and Nigeria respectively.

Due to scalability limitations in Brick and Mortar banking these adults are unable to access or afford bank services, insurance and pension plans.

Some of the causes for unimproved situations include investments cost, people and culture barriers. However, it is worthy of note that the unbanked carry out daily financial transactions through informal means which are not institutionally recorded / recognized in the GDP of Africa.

The Central bank of Nigeria have spent over $ 10 million to tackle the situation in Nigeria but there is no articulated initiative to handle insurance and pension, there is no way to know and leverage their financial standing in their communities and informal financial groups to enable them access quick loans, Micro-Insurance and health schemes

This leaves most of the unbanked to die in poor living and health conditions due to lack of safety nets, which further inhibits the growth and advancement in Africa.

Our solution is targeted at 60 million poor and unbanked adults in Nigeria especially those living in rural communities.

They include farmers, petty traders, the elderly, women, girls and other informal workers.

Areas where problem, solution and dimension align with The Mission Billion Challenge: West Africa Prize:

- The problems covers the poor, unbanked adults and informal workers in West Africa.

- Finaclusion is tech based

- It serves the largest west African country; Nigeria

- It is focused on providing affordable and shared insurance, pension and savings plans to informal workers.

-Solution is scalable globally and interoperable with social programs, institutions and governments.

-Our model incentivises informal groups to save while providing free insurance and pension as group membership benefits.

While existing competitors are focused on models that charging normal prices per person for insurance and pension, we are focused on a shared model that digitally provision shared insurance, and pension plans to low-cost informal group and not per person.

We work with insurance and pension institutions to provide this digital services as we do not offer insurance or pension services directly but act as digital agents.

As regards, distribution and marketing of our solution, while our competitions are leveraging complex and expensive agency models, we are leveraging existing mobile money agents across the country who will leverage our mobile apps and USSD / SMS platforms to provide our services to informal groups. This helps us to scale and market at very reduced cost.

Mobile money agents will be paid based on commissions and volumes of transactions done by informal groups they handle.

One unique about out platform, is that it helps members of groups to have verifiable credit scores and financial history with banks enabling them to easily access loans and support from banks.

Our platform KYC helps build some level of Identity for the unbanked which could be useful in creating more value for the people and financial institutions.

See examples of similar models below:

• Savings and insurance products developed by a startup  in South Africa
• Related: Government schemes for the informal sector such as  Haba Haba  and  Mbao  in Kenya,  Ejo Heza LTSS  in Rwanda,  Micro Pension Plan  in Nigeria,  ECIS Project  in Zambia.

In order to access our services,

• a mobile money agent downloads our application.
• uses it to create group accounts and r each member to the group account created
• Receive and record group contributions, membership fees, savings, donations on App
• Members could access their balance, apply for loan, or make repayments/contribution through USSD/SMS banking

The Revenue Model.

The revenue model is based on the monthly / daily membership or transaction fees, where the mobile money agent is paid 20% off it, 30% is reserved for micro-pension and 30% for Micro-Insurance per month while 20% is paid to Finaclusion.

For example, an agent in a Yoruba community in Nigeria, manages 10 informal groups of 50 rural farmers each. The farmers save an average 50cents daily which amounts to $15 monthly. Each farmer is charged $1 per month for the service.

Here is a breakdown of the revenue flow from that particular agent for the month:

Number of groups managed: 10

Number of members managed: 500

Total Transactions: $7,500

Totals Income from charges: $500

Insurance and Pension Package per group per month: $12.50

Monthly Pension contribution per member = 25cents

Commission paid to agent for the month: $100

Finaclusion revenue = $100

Server Demo:  https://demo.finaclusion.com/h...

According to the African word; Ubuntu, we are stronger together, this explains the inherent culture in Africa, Asia and other developing regions. They believe in doing things in groups.

This explains the reasons for the vibrant informal sector powered by informal groups in these regions.

In Africa / Asia there pre-exist, their community-based traditional financial systems which they run based on their strong trust systems where they do not require KYC, credit score, collaterals for loans, background checks etc.

Unfortunately, banks still offer conventional and western banking systems which lacks consideration of the peculiarities of the people and their culture. 

Connecting the dots between the Afro-Asian ancient financial methods and the western methods is key to unlocking the micro-insurance and micro-pension.

Before colonization, Africans and Asians already had ancient methods of banking and distribution of finance which is inherent in our culture, hence it is important the global policy makers and regulators start exploring building financial systems and software which are also based off the African people's inherent financial systems. We believe this will help accelerate the level of adoption of banking across Africa.

Also, trust and relationship are part of the most valuable foundations that encourages almost any business or financial transaction. Once people have existing relationship and trust, it makes it easy for any business / financial transaction to occur among the people in that trust system.

A concept exist that value of money could be influenced by time and need. The theory shows that money kept for any period of time without been used, could have been maximized or invested / slow to someone else during the period it is not needed to generate more value and vice versa. People with urgent need of the money or product might be willing to pay higher to access product. This is concept that make lending business successful. Some people have idle money while some other people need that idle money urgently meet needs.

The above concepts is what makes the informal group model very effective in Africa, and digitizing this existing system through Finasure will fall in line with what Africans / Asians accept and believe.

Apart from Finaclusion's flexible integral process and business model, the platform is based of a robust API-driven and democratized Digital Financial Inclusion Platform powered by an open ecosystem-driven agent network across Nigeria to bridge the divide and create synergies between the unbanked and institutions.

This means we can easily partner or integrate our systems with any social protection or public service delivery system within few weeks. This enable us to integrate with more banks, e-government platforms, international organizations and relevant stakeholders. 

Presently are connected to disburse payment in over 10 African countries.

We also has mobile app that allows any mobile money agent, group or organization anywhere to easily create an account with us and immediately recruit members / clients within their reach or community.

We do not deal with customers directly but we deal with Lenders, informal group admins, cooperatives, and Micro-finance institutions who use our platform in serving their clients and also make a means of livelyhood.

Our services could be accesses on web, android, iOS, SMS, USSD this allows user friendly channels both for the unbanked, members of informal groups, stakeholders, and mobile money agents.

Our system have been tested in over 10 countries for a period of 12 years and it is built by a community of developers, UI / UX experts, testers. Our platform have gone through 15 versioning which have ensures high its user-friendliness.

Our system also have well document REST APIs which could be used for integration with any partner platforms required.

Our system already have well documented open APIs based of REST API standards. Our platform is based the following technologies:

-Java, Springboot framework

- Html, Javascript, CSS

-Tomcat Servers

- MYSQL database and Session stores

-Nodejs, Express and Angular Framework

Our servers are hosted with Amazon Web Service (AWS) which has all the international certifications required for running data center providing highly secured server service to its customer.

Our payment platform is run by banks who already have very secured servers, our system connect to banks through secured APIs in order to carry our bank transactions.

Our payments processors is hosted with Visa Card partner company which we integrate to provision cards to our providers' end users.

As our customer needs grow and evolve, we will expanding our cloud servers and integrating with more platforms.

We understand that most of the poor and unbanked include users with low literacy and numeracy skills and we are managing them in the follwoing ways:

- Use of existing mobile money agents to operate our mobile apps and manage operations for them on their behalf.

- Our system is connected SMS and USSD technologies which most of these populations are very familiar with.

- Our solution is based off their cultural ways of community banking in group, this makes our offerings very easy to understand.

We are presently serving 15,000 users on our platform. With the scalability of Finaclusion across West Africa we hope to reach to 100,000 unbanked adults in the next one year and 5 million users in the next 5 years.

We intend to ensure that we have 5 million people impacted by Finaclusion and in trying to achieve this we intend to do the following:

- Increase our online push marketing

- Partner with financial institutions and Telecom operators in host countries of operations to expand our reach.

- Hire 20 more staff members which includes developers, business developers, digital marketers

- Expansion and scaling of our Amazon Web Service Servers.

- Translation of our Finaclusion into 10 more international languages

- Attend and speak at international conferences.

There also existing variance in wants and needs of customers from country to country. Below are areas of possible barriers:

Legal

legal frameworks and regulation make influence the level of partnership with could establish with Financial Institutions at countries of operations. These could affect.

Data privacy laws also varies from Nation to nations

Technical

Technologies are always changing and using outdated tools could open the door for data breach and security threats. Maintaining and securing servers and platforms which serve several continents could be demanding.

Cultural and Market barriers

Security: The Whatsapp / Telegram platforms already provide highly secured population with end-to-end encryption, we need to add such layer of security on Fina to make people more comfortable with the solution. 

Variance of Customer need: We intend to hire community managers who are citizens of host countries to help interact and manage product offerings to customers in their countries.

Legal

We will ensure to hire experienced and qualified legal and data privacy experts to join in ensuring we meet up with every required standards.

Technical

We are expand our technology team and also using scalable AWS cloud servers to help use easily meetup with latest cloud technologies, improve our security and provide exceptional customer service

none

we presently have 3 full time staff, 5 part time and 5 on contract basis.

The team consist of multi-disciplinary and experiences talents who have the can-do innovation-driven mentality. We  have built acumen and experience in areas of financial inclusion while running mobile money projects in Nigeria since 2013,

Our founder, David Alozie has been providing financial inclusion platforms to organizations since 2017. He built acumen and interest in financial inclusion while running mobile money projects in Nigeria since 2013; he supported Ecobank Mobile money, Etranzacts’s Pocketmoni, Etisalat/Gtbank Mobile.

Our Operations and Marketing officer, Ayo Emakhiomhe,  who has over 20 years of financial and organizational management experience both in the formal and informal sector.

Our Software developers, opata Chibueze has built different software platforms for the banks and other sectors. with over 25 years of experience in programming and software development

Our communications and management officer has over 3years of experience in financial innovation. Our Co-founders are dedicated and committed individuals who possesses skill in technology and management with experience in both

Finasure presently has two categories of partnership which includes:

- Flutterwave which is partner with Visa Card, providing us with payment access to over 10 African Countries

- Mifos Foundation, USA, which provides us with Internationally tested financial softwares which power part of our platforms.

The business model is based on transaction fees, where the mobile money agent is paid 20% off it, 25% is reserved for micro-pension and 25% for Micro-Insurance per month while 20% is paid to Finasure.

For example, an agent in a Yoruba community in Nigeria, manages 10 informal groups of 50 rural farmers each. The farmers save an average 50cents daily which amounts to $15 monthly. Each farmer is charged $1 per month for the service.

Here is a breakdown of the revenue flow from that particular agent for the month:

Number of groups managed: 10

Number of members managed: 500

Total Transactions: $7500

Totals Income from charges: $500

Insurance and Pension Package per group per month: $12.5

Monthly Pension contribution per member = 25 cents

Commission paid to agent for the month: $100

Finasure income/revenue = $100

With all agents generate an average of of $100 per month, with 10,000 agents, we expect a revenue in flow of up to $1,000,000 monthly.

Based on our business model, we will be sustaining the business through inflow from mobile money agents distributed across Nigeria.

However, we also hope to hit a market evaluation of $100M  and also raise our first and second round of investment to help us acquire more users and reach other continents within 2-5 years.

We also expect to receive donations and grants through applications we are making all over the world.

We are not ready to start raising funds for our solution. We hope to start the process within the next 1 year.

We plan to raise $2 million dollars in 2021 to support our scaling across Africa

Below is our monthly expenses for the year 2020

1. Employee wages $20,000

2. Rent payment $40,00

3. Advertising and marketing cost $5,000

4. Legal and professional fee $4,500

5. subscription (cloud servers and internet) $2,500

6. Depreciable asset (furniture, equipment and machines) $ 3,200

7. Utilities (telephone, electricity and fuel for generator) $1,500

8. Tax preparation fee $ 1,000

In the short term, we require support from Solve in acquisition of more partners in financial Institutions, networks and organisation which help our solution gain more acceptance and hence help us generate enough revenue to sustain the platform.

In the mid-term, we will require forward thinking mentors/advisory from Solve from different industrial sectors to guide us and help us with reasonable network for our platform.

We will also require first round of funding of about $2,000,000 in equity or convertible debts to help our expansion efforts and recruitment of team across Africa.

In the Long -term, wider participation and usage of our platform to help us make our platform robust and rich with reasonable network effects based on financial records and digital identities on our platform. In order to reach this wider audience, we require endorsements/partnerships from international organisations in order to gain further acceptance across Africa in order to earn bigger collaborations with global financial institutions.

We require partnership with Telecom operators, Financial Institutions and governments in several Africa and Asians countries to us with product/service distribution.

We also believe partners will become part of our advisory to point us in the right direction in the area of recruitment, marketing media, revenue model, legal and regulatory.

We desire strong partnership to help scale in all host countries.

We will be very grateful to connect with prospective partners in the Telecom, Financial Institutions and public sectors in several Africa and Asians countries to us with product/service distribution.

We seek organisations like:

Ecobank

Zenith Bank

Bank of India

MTN Group Africa

Airtel

Safaricom

Faculty and partner organsiations of MIT Solve able to help directly or directly in listed areas above.