MIT Solve

Solution Overview

Solution Name:

Sik'Of Tomorrow

One-line solution summary:

This is a social insurance program for informal workers aimed at providing workman’s compensation, working capital cover and pensions

Pitch your solution.

Ghana’s informal sector is valued at GHS45.2 billion. The sector contributes over 50% of GDP and employs about 80% of the total workforce.

And yet they do not appear anywhere on the government’s radar. As a result, they are not supported by government or by the formal financial and insurance systems. This situation is common across West Africa.

The situation leaves the informal sector workers with;

No protection when they get injured in their line of work,
No protection when they lose their working capital in a disaster and
Nothing to safeguard their retirement.

From the CEO of the People’s Pension Trust, “informal workers in Ghana are concerned about how long they could work and afford retirement”.

Our solution;

A web-based fintech application
Leverage and integrate existing technologies
Partner financial institutions within the region.

Insurance for 1.6 million Informal workers in Ghana and for 10% of West Africa’s.

What specific problem are you solving?

Sik’ Of Tomorrow will provide West African informal workers work related insurance covers they can contribute to and withdraw from anywhere in the sub-region. Thereby eliminating the limitations imposed by location, currency and language.

There is very little or no insurance cover for the informal worker not to mention any that can be accessed seamlessly within the sub-region. They constitute between 60% and 80% of West Africa’s workforce and they also constitute more that 50% of movement within the sub-region to find work or to trade. According to ECOWAS, regional trade has increased by an average of 18 percent per year between 2005 and 2014. This means more informal workers trading or working across borders.

Most informal workers do not bank accounts, as a result, they keep their monies (salaries, working capital) in unsecure places subject to robberies, fires and floods.

2019 in Ghana saw more than 5 market fires destroying livelihoods and assets that ran into millions of Ghana Cedis. These were followed by floods affecting localities inhabited mostly by informal workers and their businesses.

With this solution, we can ameliorate the untold hardships informal workers in Ghana and West Africa face when disaster strikes.

Who does your solution serve, and in what ways will the solution impact their lives?

Our solution is targeted at the urban informal workers with following characteristics;

Demographics
- Ages: Between 18 and 40 years
- Gender: Both females and males
- Education: Primary to tertiary
- Area of employment: Services, construction and manufacturing
- Place of work: The city centers and within the communities in the form of corner shops, and small markets selling local food items.
- Use of technology: Comfortable with mobile devices, mobile app and mobile money
- Income level: Between GHS 5.00 to GHS 50.00 a day ( USD 0.78 – USD 8.69)
- Habitation: Community of kiosks (wooden structures), squatters of uncompleted buildings and some live in their shop kiosk.
- Household: From single to living together or married with or without children
- Religion: Christian, Muslim or Traditionalist
- Products being used now: Susu (micro-savings)
Psycho-graphics
- Values and beliefs: God, family and community
- Attitudes: Trust, hard work and respect
- Interests and hobbies: Men – football, drought, cards. Women – Lodu and snake & ladders
- Favorite TV and radio stations: UTV, TV Africa. PeaceFM and other stations offering content in local dialects.
- Pain to solve using our product: Recurring losses of income and working capital. No security for old age
- Concerns using our product: The collapse of financial institutions and subsequent loss of savings.
- Potential turn offs from product: New name or brand in the space
- Why customer may recommends product: Partnership with known financial institutions.
- How much is customer willing to contribute: Between GHS 1.00 to GHS 20.00 (USD 0.17 to USD 3.47) daily.

While developing the solution, there was routine engagement with informal workers in Sakumono, Tema. They included plumbers, electricians and sellers of local food stuffs in the community. In addition, published works on the informal sector of Ghana such as “The Informal Sector in Ghana” by Clara Osei-Boateng and Edward Ampratwum (https://library.fes.de/pdf-files/bueros/ghana/10496.pdf ) were referenced to give context and perspective to our solution. Documented interviews with key players in the insurance industry such as the interview of Sam Bediako Waterberg, CEO of the People’s Pension Trust, by Devex (https://www.devex.com/news/can-a-new-pension-scheme-offer-security-to-informal-workers-in-ghana-91296) were also reviewed.

There are a myriad of challenges facing the informal sector of Ghana and West Africa for that matter. The one challenge our solution will be addressing is the challenge of insurance.

According to the CEO of the People’s Pension Trust, “People are really concerned about their pension, because they have seen older people suffering without a pension”.

Our solution will offer informal workers insurance schemes that will provide cover for their livelihood and pensions. The solution will require them to contribute micro-amounts on a daily basis into pooled funds to be managed by our financial partners. The contributions will be done directly from their mobile money wallets. When there is the need to withdraw, it will also be done directly into the mobile money wallet. Pooled funds will be invested in safe investments such as Government Bonds and Treasury Bills.

Which dimension of the Challenge does your solution most closely address?

Deploying features that use regionally interoperable foundational ID systems and can be accessed across borders, network providers, and languages — allowing workers to receive services and make contributions or withdrawals regardless of origin or location

Explain how the problem, your solution, and your solution’s target population relate to the Mission Billion Challenge WURI West Africa Prize and your selected dimension.

Mission Billion Challenge

Problem - No insurance and pensions.
Target population - Urban informal workers in Ghana and West Africa.
Solution - A web-based fintech platform that will integrate and leverage regional technologies and partner regional financial institutions to offer insurance and pensions.

Dimension One

Problem - Irregularity in contributions, transparency, accountably.
Target population - Urban informal workers in Ghana and West Africa.
Solution – Reminders, chart, contribute from mobile money, notifications and history

Dimension Three

Problem - No insurance and pensions.
Target population - Urban informal workers on the move.
Solution - Integrate and partner regional technology and financial institutions. Multilingual services.

Where is your solution team headquartered?

Accra, Ghana

What is your solution’s stage of development?

Pilot: An individual or organization deploying a tested product, service, or model in at least one location.

Who is the primary delegate for your solution?

Barry Setor Smith (CEO/Founder)