Crosspoint

Millions of low and middle income families lack access to basic financial services, insurance, and savings. Apart from the fact that most solutions seem to price them out due to their low income levels, they also lack basic understanding of financial service and face unstable income situations. Our solution helps individuals within this demographic invest what they have, when they have it in simple financial tools using either a smart or feature phone, pay insurance premiums to cover unique risks they face and pay premiums they can afford while affording them the opportunity to save for specific milestone projects.

In Nigeria for instance with a population of nearly 200 million people less than 5% of the population is covered by any form of health insurance while having no social protections against risks to their health, lives and livelihoods. In a country of over 174 million people, 3 million people own a policy with insurance penetration rates estimated at 0.7%(PWC, Nigeria insurance survey). With financial exclusion rates estimated at 36.8% it is clear that a lot needs to be done to bring financial services and basic protections to more people. Coupled with the fact that this data may likely be far from accurate and most of the affected are illiterate it becomes clear that bringing investment, savings and insurance to these individuals will require going into their communities, talking to their unions and customizing solutions to meet their needs. Our solution takes into consideration these factors of illiteracy and income to create flexible micro-investment and micro-insurance plans to give these individuals protections they desperately need but can’t access as yet. Investment requires no knowledge on their part as they can watch their purse grow on an app or simply using USSD codes.

Our target customer belongs to the low and middle class sector of the economy. They either work in the informal sector or own a small business. They may live in urban centers but are typically found in rural settlements. In their daily life they are faced risks and challenges that threaten their health, lives and livelihoods. They neither have the means or resources to invest in traditional financial services as currently structured, insure their health and livelihoods (work or business) or enjoy such benefits as pensions. We have spent months talking to individuals within this demographic by going into markets, farms, offices and expect to keep interviewing them directly with the help of agents and volunteers. Crosspoint will provide these individuals the ability to invest, save and access insurance simply using their mobile numbers. They may access our solution using our platform, via USSD or with the help of agents with whom they interface on ground. Most importantly in the face of these risks to their health, work or businesses these individuals are not faced with crippling loss, debts or worse.

Our problem is closely aligned to the Mission billion challenge as our focus on simplifying the process of uniquely identifying and onboarding low and middle class families and individuals in rural settlements into financial services reflects. In alignment with this mission we employ user phone numbers as the first means of identification these individuals while helping them create a financial profile and providing protections from financial and life risks. With our solution it becomes possible for the trader to insure her stall or goods while the janitor may easily invest a portion of her income.

Our solution fits into the fintech space while directly taking on the traditional banking, insurance and investment sectors. In the fintech space many companies currently operate in Nigeria like paga, kuda in remittances and carbon, sparkle and migo. We are different because we offer more value to our customers by offering them rewards, flexible plans and payments and other incentives. We expect these incentives to encourage our target demographic to adopt our services but most importantly because of the flexibility offered by our plans they would not feel like a price is being imposed for the adoption of our services. Insurance has for years operated under certain simple premises where premiums are set for a limited number of scenarios which unfortunately alienates a good segment of the population when

We consider our solution to be more of an improvement of the current processes and models than the application of new technology despite the fact that we intend to adopt such innovative technology as artificial intelligence and blockchain technology to deliver value to our user base.From the list of competitors listed earlier it is obvious that financial technology is a growing concern in developing and emerging markets but the simplicity of delivery can be improved upon and target base can be refocused to those who most desperately need these services. These individuals may not necessarily own a smart phone despite their interest in using such services as investment and insurance for themselves or their livelihoods. It is also possible that these individuals may stay in locations or settlements that have poor internet connectivity meaning they will have to work with agents and use USSD services, interaction with agents or even phone calls to interact with our system. It is also important for our solution to help each user address their unique needs such that they subscribe to a service that reflects their life, job, environment and income.

Many individuals and families from low and middle income households lack access to insurance protections and investment. There are traditional attempts to save like what is traditionally called ‘ajo’ where participants contribute monthly and one individual gets the bulk funds to utilize. It is our believe that with our incentive and rewards heavy platform, users will be more than happy to use our platform tor transactions and investment. We also expect that the flexibility offered to users will encourage them to customize their insurance protections to cover such losses as fire, theft and other risks especially as regards their business.

For informal sector workers we intend to offer them the opportunity to invest save and access insurance services. Most national identity management systems have information on these individuals but unfortunately lack both the funding and the organization to adequately provide these services directly to these workers. Partnering with the government to offer our services while they provide us with early data and access will greatly ease the strain required to reach these individuals ourselves. For informal sector workers who typically belong to the low income sector of the economy our solution provides them with protections from the risks they face in their daily lives while offering them the opportunity to participate in financial services without dealing with most of its inherent complexities. This simplicity will not put their finances at risk as they can follow the returns on their investments by using a USSD code, get compensated for losses to their businesses in case of loss(services for which they are typically priced out). We believe they should be offered similar opportunities as other more literate, higher earning individuals.

While our solution is delivered via a mobile first application/platform our users are able to both interact with the application via USSD  or text messages as well as with the help of agents on ground. Not only does this mean they don’t require an internet connection to use our services, but they don’t need to be digitally savvy or own a smart phone. They also do not require an understanding of financial markets to invest nor extensive capital for the same purpose. They may also customize their insurance plan to both reflect their need/skill level and income. Our solution will be intuitive thus, meaning it will significantly reflect the life, environment and income of each customer. Customers can determine the amounts they can safely set aside to invest, pay as premiums or save and this is expected to be micro amounts when placed against offers from other players within the market. We also hope to use information garnered from user behavior to make the solution reflect their needs and habits more closely.

We intend to provide API's for businesses and developers who intend to implement rewards systems in their applications and businesses. As part of our roadmap we are also looking to build and implement and API for medical record integration. We are looking to explore further opportunities for making certain aspects of our technology more readily available in order to reach a wider network of people.

Financial services are generally complex and confusing and application based. We understand this and despite the fact that we face the same issues we have taken steps to reduce the complexity of the process by for instance making investments easy for our users by pre-curating it on their behalf so that they can focus on keeping updated on their returns. Despite our platform working behind the scene, users can easily interact with it using USSD for subscribing to an insurance plan, investing and savings. We also intend to interact with users through agents who chelp them perform transactions with low connectivity but are able to update their systems once they have internet access (there are low connectivity checks to ensure compliance). We will also explore the utilization of non physical agents to help customers resolve issues related to use, connectivity and transactions. 

Because we are yet to go live and to market we currently do not have customers using our solution. In the first full year of operation we hope to reach between 700,000-1,000, 000 individuals who will have access to either our investment or insurance services. Our remittance service is also expected to be one of our major sources of user growth considering the rewards/incentives and projected customer friendly terms. Our estimates project that we can double the number of active policy holders by an estimated 2-5,000,000 individuals within the next six years in Nigeria alone with plans to expand to other countries within West Africa and beyond. Of specific import to us is achieving significant uptake in small business and health insurance policy holders which are some of the areas we will focus our marketing and user education efforts. 

With insurance penetration rates in Nigeria at less than 1% and 3 million people with an active policy for a population of nearly 200 million there is room for growth in adoption of insurance in Nigeria our first target market. Compare that with South Africa that has penetration rates of 16.9%. We hope with our flexible insurance plans we will be able to contribute to the increase of these numbers to somewhere close to 10% in the next 6 years.  The alarming level of vulnerability of Nigerians, Africans and many in developing or emerging marketWe hope to implement a reward system where users are rewarded on every transaction. This will be made available to other businesses and developers for implementation in their applications. this we  believe will help more companies effectively pass rewards to their users. 

Like most businesses working and building on the African continent and in Nigeria the policy and economic environment remains a major challenge in building our solution. Infrastructure challenges also make operating in Nigeria the market where we plan to start operations particularly challenging. Culturally there is a distrust for major financial institutions by a section of the demographic of users we intend to target which means we will need to spend some time to build trust, sensitize and educate them. Also in the selection of our investment portfolio we will need to ensure certain portfolio are void of companies and institutions that are not acceptable to certain individuals with strict moral and religious. Significant interest in the financial technology space in emerging markets means we will see significant competition thus requiring us to constantly innovate both in our technology and our processes.

We were selected into the second cohort of semicolon Africa a local technology training and incubation programme for aspiring technology entrepreneurs in Nigeria where we are currently in the idea to MVP stage of incubation where we intend to build out the first version of our product. As part of the program we hope to work with the organization and use their standing to connect to insurance companies and investment firms to create products and plans for our users to utilize.

Currently majority of the people that make up my team are part of the cohort of Semicolon Africa a training and incubation organization in Lagos Nigeria. The team is made of of passionate individuals who have built competency in software development, product design, consulting, sales and engineering. While we expect to go into full incubation into the program we hold rights to our future product and business while the incubator may eventually acquire a minimal stake (2%) in our future concern.

We currently operate with a team of five software engineers, product developers and designers. This core team is involved in the development of our platform, design of our product, determination of core features as well as early design of our business processes. We are also working closely with two product managers and a product designer as part of our participation in Semicolons incubation program earlier mentioned. We are also being mentored by an experienced team of advisors whose expertise span business, medicine, product, branding and sales.

Our team is made up of individuals who have experience in systems engineering, consulting, sales, design and software development. We have been extensively been involved in local and international projects, multi-team and multi-sector operations that positions us to effectively face the challenges faced in tackling the 

We are currently entering incubation at Semicolon Africa where we are expected to pitch in front of their network of investors between the 3rd quarter of the year or around the start of the 4th quarter of the year. We are also looking to partner with a certain organization that provides verification services to organizations for informal staff in order to use their API's for verification of users on our platforms (discussions are currently exploratory and in the early stages). We also intend to enter into discussions with at least two insurance firms and investment management firms after our first stage of building. Also worthy of  note is the fact that we participated in celocamp a blockchain based accelerator where we made into the final 15 from over 250,000 proposals.

Our primary customers are low and middle income users who lack access to most financial services and social protections from risks to their livelihoods, health and property. We provide these individuals a platform through which they may handle their daily remittances but most importantly they can invest any cash they can afford to spare, get insurance protections for their health, livelihoods or property. They typically interact with our platform via an app, a feature mobile phone where they can perform USSD transactions and through field and off field agents. These individuals need our services for several reasons some of which include access to healthcare (reduction in the cost for this outcome), grow their money, save for milestone events or projects. Our typical users are mostly not financially literate so investment and insurance plans are measured based on clearly defined benefits to them. While many of our users have limited income, they are interested in protecting themselves from possible risks faced in their daily lives at home or work.

We will be exploring grant options to supplement our early bootstrapping efforts to get the project off the ground. We will also be exploring seed investment once we consider ourselves ready to face this path in an effort to get our products into the hands of our customers. We will be exploring several revenue streams as we get our product in front of the customer. First we will earn a commission for every plan users subscribe to using our platform. While we will be working closely with select insurance organizations to develop these plans we will be requiring a lock in to ensure our plans are unique and competitive. While we are committed to keep fees low for our users due to their financial status, we still expect to charge a fair and minimal transaction fee to keep the engine going and support our long term growth. We are also looking to employ blockchain technology as a means of generating cryptocurrency some of which is passed to the customer as a reward/incentive. Finally, we expect transaction fees from remittances especially from the diaspora community or migrant workers will offer a significant source of revenue.

We are yet to go to market and have yet to start raising external funding. Current funding has been bootstrapped collectively by the founding team.

To get our solution off the ground we are looking to raise $100, 000 especially in grants and equity and as little debt as we can manage. Because it is a cause we believe in and we believe can get to scale we will depend on the recommendation of key stakeholders, advisors and partners to determine which funding sources are best suited to meet our funding goals.

Because we expect that most of 2020 will be spent in building out our solution or estimated expenses will be limited to personnel and marketing costs. Also as office space is part of our coming incubation that is not expected to be a short term cost. 

Estimated expenses for 2020 are as follows:

Personnel: $5,000

Marketing: $8,000

The Mission Billion Challenge offers us the opportunity to raise valuable funding required to get our product in the hands of our potential users. We also hope to use the platform to get valuable mentorship, support and publicity as we seek to grow our partner network in our efforts to build a sustainable solution that brings financial solutions to some of the most vulnerable individuals in the emerging world economies. It is our goal to get in front of the right partners, leaders and mentors who can aid us in our journey to make financial access more readily delivered to low income families and informal workers. Also important is ensuring that we get mentoring on setting up proper corporate governance  structures in order to ensure our business operates on a model and with processes that ensure her long term sustainability. We also believe being part of the challenge will help us identify further opportunities to build and innovate for the benefit of our target and if possible a wider demographic of users.

We require mentorship in our efforts to raise required funding so we can grow our team and include individuals with more varied backgrounds and skill sets. We also require access to strategic partnerships as we seek to grow a sustainable brand that can impact individuals and communities around the world. We also believe if selected for the program the experience of the organization will help us in getting our product in the hands of our desired customers faster as well as in front of the right audience required to achieve the mission for which we have set our sights.