Save42moro

According to UNHS, Uganda’s working age population stood at 19,104,000 of which 78.8 percent were working most of whom are in the informal sector and agriculture. The current pension system comprising of NSSF, the Public Service Pension Scheme and occupational voluntary savings cover less than 5% of Uganda’s workforce, mainly urban workers. It does not extend to the majority of citizens, including those employed in the agricultural sector, the self-employed, the missing middle, and those employed in the informal sector.

Save42moro an inclusive micro-pension project intends to educate, encourage, and enable low income informal sector workers to accumulate micro-savings for their old age through a Micro Pension model and a technology-led platform that delivers non-credit financial services to the working poor, including pension and micro-insurance products. Also, through partnership with MTN&Airtel platform enables customers to save and borrow money instantly through their mobile phones while earning interest on money saved.

According to Mission Billion Challenge WURI West Africa ‘The Informal sector challenge ’, social insurance still largely relies on formal employment contracts and only covers 2 percent of people in the poorest quintile. This represents distinct issues in the provision of social protection.  Pensions which are built around savings from a stable employment contract and a fixed point of retirement are neither affordable nor designed for informal sector needs.  

Building on that notion, over 19 million Uganda's low income informal sector workers especially women in poor households are excluded from formal pension programs and are highly vulnerable to the risk of old age poverty.  

Meaningful financial and social security inclusion is constrained by suboptimal access by the poor to regulated savings and insurance products, and equally limited access to banking and other secure micro-payment mechanisms.

These challenges are compounded by fragile labour market attachments, low intermittent incomes and savings capacities, and low literacy and financial illiteracy of the excluded population. As Uganda and most of other low-income countries in Africa cannot afford the fiscal cost of a nationwide social pension, the excluded workforce increasing will need to self-provide for their own old age and insurance needs.

During our community survey, we discovered that government provides livelihood related services to remote, and hilly households. Even though their incomes are enough for their current consumption, the workforce will likely face old age poverty when they are too old to work. A large latent demand for micro-pensions can be observed among this group. But the nearest bank branch is nearly 70 kms away and individuals have zero access to regulated financial services.

Save42moro targets rural and urban low-income informal sector workers in any given community who are largely self-employed. They include farmers, head-loaders, domestic help, street venders, milk and dairy producers, artisans, construction workers, daily wage earners, home based workers, contract and casual workers in factories.  

Individuals save $1-$2 weekly or $4 to $6 monthly in a customized, integrated financial solution consisting of regulated pension, insurance and micro-savings products. Save42more reaches excluded individuals through credible outreach partners including Micro Finance Institutions, cooperatives, employers, rural banks, CBOs, NGOs and unions.

Periodic micro-savings are then transferred directly (and cashless) to product providers using MOMOPay (MTN), Airtel-Money and bank accounts. Pension/insurance payouts are transferred directly by product providers into the bank accountor mobile money of individual clients or their nominees.

By Save42moro pioneering the concept of contributory pensions for low income workers, we shall become the only social enterprise that focuses exclusively on encouraging and enabling excluded individuals in the informal sector who are always left behind due to lack of formal employment to meet the standards of current social insurance programs to accumulate micro-savings for their old age, insurance and known future expenditure in a convenient, affordable and secure environment using a scalable and sustainable micro pension model as opposed to the current social insurance programs that still largely rely on formal employment contracts as our problem statement states.

The current pension system comprising of NSSF, the Public Service Pension Scheme and occupational voluntary savings cover less than 5% of Uganda’s workforce, mainly urban workers and are largely dependent on formal employment leaving out majority of citizens in the informal sector especially those in agricultural sector, self-employed, missing middle and elderly poor.

Save42moro brings a concept of contributory pensions for low income workers in impoverished markets focused exclusively on encouraging and enabling excluded individuals to accumulate micro-savings for their old age, insurance and known future expenditure in a convenient, affordable and secure environment using a scalable and sustainable micro pension savings model focused on putting together both available and missing necessary ingredients to build a secure, scalable and sustainable marketplace using which millions of women and other vulnerable household groups and excluded individuals are able to accumulate tiny amounts for their old age and other investment goals.

Unlike NSSF and MFIs, Save42moro is flexible in that clients can deposit as low as $1-$2 weekly or $4-$6 monthly using their mobile money payment systems accessible by our customers like MoMo Pay (MTN), Airtel Money, Orange Money and bank direct transfers/deposits wherever they are.

Save42more also offers customers both a Deposit and a Loan product that are  convenient, reliable and cost-effective for making micro-savings and taking micro-loans to allow customers to save their money safely in their phones with ease thereby helping them save for their goals entirely from their mobile phones, with no forms or additional documents required.

Just like Invest Micro Pension for Informal Sector Women Workers,  India Micro Pension Services (IIMPS) , IIMPS “Micro-Pension” model ,  has been able to transform millions of low-income people with savings, insurance and financial literacy in India, Mbao Pension Plan in Kenya that targets informal-sector workers, provides workers with a voluntary mechanism for pooling and investing their savings, Save42moro intends to develop a simple micro pension model and a technology-led platform that delivers non-credit financial services to the working poor, including pension and micro-insurance products through independent contract agreements in collaboration with national and regional banks, microfinance institutions etc.

Through partnership MNOs MTN and Airtel, customers will be allowed to save using MTN Momo Pay and Airtel Money to take short term loans without the need for the traditional red tape involved in loan processing that shall be accessed through their mobile phones in record time.

We shall then develop a financial literacy strategy and a retirement literacy toolkit to inform and educate beneficiaries about pensions, savings, and insurance concepts and products; and include financial solutions like long-term retirement savings, micro mutual funds, micro-insurance, and new financial and risk management solutions; micro-payment solutions for banking customers of partner banks, unbanked rural and urban poor, and other low-income workers with bank accounts or mobile money accounts; and policy advisory and consulting services. In addition, it develops sCube, a Web-based micro-pension transactional and administrative IT platform for real-time electronic transactions reconciliation and processing with financial product providers and payment solutions partners.

World Bank Uganda Economic Update report, “Reducing Old Age and Economic Vulnerabilities: Why Uganda should Improve its Pension System,” examines the on-going reforms in the retirement benefits/pension sector that is intended to ensure that workers maintain a reasonable level of consumption and access to basic needs even after retirement, by saving some of their income during active employment.

 World Bank Country Manager for Uganda, says although the country's economy has remained on a positive growth path despite shocks, growth policies need to be complemented with social policies to eliminate extreme poverty and achieve shared prosperity.

Save42moro will encourage and enable excluded individuals to accumulate micro-savings for their old age, insurance and known future expenditure in a convenient, affordable and secure environment using a scalable and sustainable micro pension model. Individuals save $4-$6 a month in a customized, integrated financial solution consisting of regulated pension, insurance and micro-savings products.

Under the same World Bank report, having a pension affects a person’s wellbeing as it provides a reasonable level of consumption and access to basic needs even after retirement. By saving part of the income during active employment, people are able to maintain a decent standard of living, even after retirement and helps to reduce old age vulnerabilities, promoting social transformation and accelerating economic development.  

A coherent policy of social protection for vulnerable groups, including the elderly, can promote positive social transformation and accelerate economic development.  

A well-functioning pension system will reduce the risk of a significant proportion of the population falling into poverty in their old age. Pensions also bring benefits for those that are not direct recipients, as incomes are often shared with household members.

For instance, elderly household members often provide food, clothing and school materials for grandchildren or other dependents. At the macro level, appropriate management of pension assets will (i) ensure that savers get a reasonable return on their savings, (ii) reduce the fiscal burden of providing pensions as the number of recipients of public pensions grows, and (iii) contribute to the development of long-term finance for investment and of financial markets.

Through partnership with West African governments, we can scale Save42moro micro pension model to enable formerly excluded individuals, the missing middle and other groups to match towards their old age with greater confidence and a higher probability of a dignified retirement armed with financial literacy, secure micro-payment tools and voluntary micro-savings discipline.  

A mass-market for micro-pensions would perhaps also prompt a more conducive policy and regulatory response to exclusion in West African countries. It would perhaps also prompt a larger base of financial institutions to adopt more innovative and cost-efficient sales, distribution and communication strategies in targeting and reaching the next million customers for West African finance. In parallel, this could encourage other countries to design and implement similar programs targeting their own excluded citizens.  

A mass-market status for a micro-pension model will become easier to achieve in a shorter timeframe if more state governments in West Africa actively step forward to encourage mass-scale voluntary enrollments and savings discipline. In parallel, an appropriate investment in "public goods" in the form of mass-scale generic promotions and public education by the governments would shake loose the large latent demand. And business investments by payment solutions providers in upscaling the supply of convenient micro-payment (cash-in and cash-out) transaction points would create an appropriate enabling environment for long-term micro-savings. All this would in turn give regulators greater confidence in product design and delivery innovations.

Save42moro is a simple, easy, dynamic and user-friendly financial social protection that will enable low income individuals to accumulate micro-savings for their old age in a secure, convenient, affordable and well regulated Environment through small savings of as low as $4 to $6 a month in a customized, integrated financial solution consisting of regulated pension, insurance and micro-savings products and in ways that are friendly and within the reach of the customers for instance through mobile payments that provide access to banking services, no matter how isolated they are to our target beneficiaries.

Small amounts of money can be saved individually and invested collectively to grow benefits. Benefits are dependent on investment returns. On the agreed withdrawal date, the accumulated capital will be paid out in lump sum or periodically via an annuity.

To successfully reach commercially viable and stable volumes, our distribution model is very efficient and trustworthy. We incorporate financial education to create awareness of old age risks and possible actions people can take to save for their old age.

By saving during one’s active working life people will be better financially supported when they reach old age and cannot rely on working anymore to provide themselves with an income.

With this kind of well-defined micro pension model, permanent positive change is inevitable, and is an easy to implement a financial model which also integrates well with other social protection programs and delivery systems in West Africa.

Technology enables people to access financial services. Especially mobile payment and communication are drivers behind realizing financial inclusiveness. By the combined use of these technologies integrated and interoperable with other existing platforms in the different state governments, several hurdles in accessibility and affordability of micro pension products can be overcome. 

For instance our model can interoperate with any telecommunication network that support mobile money transactions to enable customers to save using Mobile Money and to take loans on a short term basis without a customer requiring a bank account and doesn’t have to fill out any forms or visit any office,shop,banking hall or service centre.

Income insecurity in old age is likely to be one of the key causes of increased poverty in several developing countries in Africa. Most developing countries are remarkably similar to each other in terms of demography, economic strength, labor markets, history, culture, legal and political structures, and challenges of governance. Hence, lessons from both success and failure in pension policy design and implementation are highly portable from one country to another.

Save42moro micro-pension model is portable and is interoperable with other models across other geographical locations, and we shall use or provide open APIs to partner with both public and private entities to foster integration with other financial databases and platforms within the African context in our collaborative efforts and quest to continue enabling low income individuals to accumulate micro-savings for their old age in a secure, convenient, affordable and well regulated environment.

As previously noted, technology enables people to access financial services. Especially mobile payment and communication are drivers behind realizing financial inclusiveness. By the combined use of these technologies several hurdles in accessibility and affordability of micro pension products can be overcome.

Through mobile payment system no matter how isolated a customer may be, they can still save using Mobile Money and take loans on a short term basis without a customer requiring a bank account and doesn’t have to fill out any forms or visit any office,shop,banking hall or service centre.

In each country, we believe that a good percentage of citizens living on less than $2.50 a day have mobile phones. Even those at the bottom of the economic pyramid, have adopted the technology faster than any other especially here in Africa. The mobile phone system has become a model for how goods, services, and ideas should be transferred. Mobile phones have become the best example of the power of connectivity.

Based on assessments we'll identify technology products most suitable for the needs and aspirations of target beneficiaries and their livelihood activities. This may include applications / digital products for banking, mobile wallets, utility payments, money transfer / remittances, applying for small loans, micro-savings, mutual fund investments and others. Technology mapping will be undertaken for multiple digital mediums including smartphones, feature phones, computers and even leaf notes. Shortlisted technology products / services will be pilot tested with a sample set of beneficiaries to seek feedback and ascertain suitability.

-Save42more being an idea that we are still researching and exploring we currently serve no beneficiary.  

-In a period of one year, we anticipate to have educated and enrolled roughly 500,000 low income workers through the Save42more micro-pension model.  

-Over the next 5 years, Save42more proposes to achieve voluntary pension inclusion and savings discipline by 15 million low income workers across multiple States and governments in Uganda. In parallel, Save42more should have expanded geographical coverage by launching the micro-pension model in the West African countries namely; Benin, Burkina Faso, Côte d’Ivoire, Guinea, Niger, and Togo.

Save42moro is focused on putting together both available and missing necessary ingredients to build a secure, scalable and sustainable marketplace using which millions of women in low income households and excluded individuals will be able to accumulate tiny amounts for their old age.

We aim;  

-To deliver a range of risk management tools (including a variety of insurance products) to micro-pension clients. In all this, we believe that our clients should receive the highest level of protection against insurable risks using optimum-and-customized financial solutions.  

-To go live with a web-based, plug-and-play platform and initiate a pilot in at-least two countries through; i) Complete integration of the mobile-based payments solution with micro-pension IT platform, ii) Expanding micro-pension operations outside with mobile moeny,VISA and a multilateral Development Finance Institutions, iii) Strengthening the R&D team at the Lab and set up an editorial board comprising global domain experts  

-To grow coverage to 1mn low income individuals through the micro-pension model and achieve >75% savings regularity by; i) Working closely with existing business partners to optimize coverage and activate the currently dormant pension accounts, ii) Upscaling the number of channel partners to reach a larger base of current excluded households, iii) Strengthening the business, operations and customer protection teams; Implement a rewards program for savings regularity.  

-Develop interactive and innovative classroom, digital and mobile-based training modules to train members in using digital finance to perform key financial functions such as accessing bank accounts, conducting transactions, conducting payments,savings,accessing credit.

Undertake the development-of-training-modules-to-isseminate-basics-of finance,basic-mobile-functions,-mobile-applications,-internet banking ect.

1.Retirement outcomes in a micro pension system depend largely on the behavior of plan participants. Thus, the single most important challenge in succeeding with micro-pensions is in achieving sustained long-term savings discipline by a population that faces tiny intermittent incomes and very short-term income and consumption horizons.  

2.Convincing poor people to save for a long period while they do not have enough means for today is a very difficult task.

3.Savings for pension is their last priority, first they need to meet with their daily basic needs, then immediate needs, and old age security is not their perceived need. This need will have to be converted into “demand.  

Other barriers may also include;

• Inadequate capital for the pilot
• Finding credible service providers
• Lack of government support
• Industry in a very nascent stage
• Not much of regulatory framework is available
• Not much of product choice is available

-Save42moro will adopt a range of parallel interventions to overcome sustainability challenge including high quality pre-enrolment education, government co-contributions (or CCTs) linked to retirement savings, convenient access to secure micro-payment options, automated payments through standing instructions, a regularity rewards program.

-To overcome awareness and trust challenges, we shall deploy sustained communication and education campaigns as well as the development and implementation of an appropriate micro-pension framework. Mass sensitization and awareness can be achieved through innovative and cost effective platforms such as social media while utilizing a robust technological platform (mobile apps) that would effectively support the provision of customer services to the target population.

3.Creation of a social assistance programme through partnership with governments to provide for the poorest elderly on a non-contributory basis using a means tested or universal approach for instance multi-pillar pension's schemes where a pillar supports voluntary contributions with government co-contributions for low income earners subject to predetermined eligibility criteria shall help us  overturn the narrative that pension is their last priority into demand.

• Design robust fundraising campaigns
• Consumer protection
• Promoting micro-pension regulation
• Expanding the industry
• Supporting micro-pension innovation
• Capacity building
• Working with community-based pension models
• Prospects for micro-pension
• Building on the limited demand studies
• Establishment of micro-pension council

N/A

We are a team of FOUR social entrepreneurs who are bound by a common goal of changing the lives of the less privileged through an innovative, scalable and interoperable micro pension model.

one team member works with Bank of Uganda the overall financial
institutions regulation center. Another member has over 10 years
experience in micro-finance, savings and pensions.

We have one IT specialist on the team who also posses over 5-years experience in designing financial related platforms for some of the leading financial institutions in the country.

The forth team member is an entrepreneur and a business consultant with over 10 years of experience in the business world.

Together,
We combine to provide a life-changing micro pension model for the
missing middle and vulnerable groups in the African informal sector with
a common vision to Save the NEXT BILLION people from Old age poverty.

However, the project will support the onboarding and capacity building of a strong administration, finance and the digital team at the central level to oversee the various digital activities of the project and achieve key development objectives. The team will be led by a Chief Technology Officer and will comprise of a Digital Financial Services Officer and a Mobile Technology / Services Officer.

This being still an idea, we currently have no established partners. However, the project will establish partnerships with various technology providers including telecom companies such as Vodafone, Airtel, MTN, Orange, Reliance Jio, Idea; Government departments that offer CCTs linked to pensions, World Bank, People’s Pension Holding PPH (c) national and regional channel partners including banks, MFIs, employers, NGOs, farm and milk cooperatives, and worker associations, financial institutions such as Bank of Uganda (BOU), Uganda Micro-finance Bank, Stanbic Bank, ABSA Bank, and Bank of Baroda; credit card services such as Mastercard; payments / remittance service providers such as Paytm, Mobikwik, Eko; unsecured small loan providers / marketplaces such as Capital Float, Suvidhaa; Fintech think tanks such as iSpirit; other financial service providers and including young organizations offering innovative financial services leveraging the India Stack architecture. These partnerships will focus on making digital products / applications available to beneficiaries in a manner that takes into account their literacy levels and level of familiarity with technology. This can mean easy-to-use workflows, simplified interfaces and multi-lingual forms. Wherever possible, the project will work with partners to suitably customize the applications for beneficiaries. The project will also explore building customized applications to digitize workflows for activities undertaken by Save42moro members if a suitable off-the-shelf solution is not available in the market. The component will support roundtable discussions, brainstorming workshops with these partners, external experts and other stakeholders to facilitate establishment of these partnerships. These discussions / workshops will be led by a Digital Finance Advisor.

-Sensitize the poor to save towards a pension corpus, which will stand them in good stead during their old age. 

-Establish a close relationship between the NGO/SHG/MFI and the members and this is sure to foster their progress

-Improve the financial literacy of the poor and thus help them to take care of their financial needs in a better fashion

-Help in generating a huge amount of funds into the market, which can be channelized into priority sectors like infrastructure.

-Reduce the burden on the government and d the funds can be put to better uses.

- Provide a platform that allows low-income workers to easily make small contributions at a relatively low cost using mobile money to contribute 1$ to $2 weekly or $4 to $6 monthly.

-Provide flexibility opportunities that encourage retirement savings, but it can also be used for savings for other purposes.

-In order to ensure inclusivity, there are no penalties if a member fails to contribute.

- Provide flexible payment systems and instant savings and loan access services through mobile money systems, including MomoPay (MTN) or Airtel Money (Airtel) etc which are widely accessible by majority of the beneficiaries.

-Create an open savings scheme to all persons with regardless of race, color, income, profession etc.

-Educate, train and sensitize members on issues around retirement and benefits and accessing bank accounts, conducting transactions, conducting payments,

-Give members the flexibility to contribute what they want, when they want and from anywhere in the country.

For those who want instant access to small short-term loans access via their mobile money wallets, a maximum amount one can borrow is 1,500,000/- at a fee of 10% of the value borrowed and is subject to customer credit limit. The credit limit is computed based on a customer’s transaction or savings records and usage. This 10% will be one of the sure sources of profit for sustainability of the project.

Save42moro shall be sustained based on several grounds including those not limited to grants and donations from governments and fund agencies, investment capital etc. both locally and internationally.

We shall also leverage our partner institutions to raise funds that will be able to sustain the project.

We shall also participate in fundraising campaigns for venture capital and all other avenues that will be at our disposal.

We have not raised any funds yet because this is still an idea which has not been implemented yet.

We intend to utilise any available doors and windows to raise funds to successfully implement this project. Even though we can't provide an actual figure of how much we might need at this material time, based on the need to empower the informal sector underprivileged workers who currently are not eligible for the social insurance schemes based on their income and other reasons, we may need to raise over $1,000,000 in different intervals in order to be successful.

This may include though not limited to grants, donations, venture capital etc.

Given the fact that we are in a time when Covid-19 has taken over the world and put to a stand-still on most of the world daily travels, social distance ect, we don't expect to have much expenses beyond $50,000.

However, come the following years, an enormous amount of social capital shall be required to run the project sustainably by meeting the various needs of the project.

By applying to this challenge, it gives us an opportunity to share with the world our innovative solution that we believe can greatly contribute to the growth and development of low-income people who are always neglected by the current standards of things. This gives us a platform to obtain financial capital that will help us develop, launch and pilot our product and service to the intended beneficiaries in our quest to achieve the mission and vision of the project. We believe that if we win this challenge, we shall get the necessary endorsement, marketing and exposure that we need to move forward in implementing the idea.

Targeted technical assistance with professionals with experience

engaging with those systems and knowledge of programs/approaches within
those systems would be beneficial to our proposed work. Additionally,
opportunities to further explore the use of technology to better serve our clients and availing the platform for us to adequately market our product and service to the intended beneficiaries.

In terms of finances to sustain the project, given the scope and credibility of the World Bank, it would be an added advantage for us to utilize and leverage their networks and experience in designing robust revenue models for the project.

The project will establish partnerships with various technology providers including telecom companies such as Vodafone, Airtel, MTN, Orange, Reliance Jio, Idea; Government departments that offer CCTs linked to pensions, World Bank, People’s Pension Holding PPH (c) national and regional channel partners including banks, MFIs, employers, NGOs, farm and milk cooperatives, and worker associations, financial institutions such as Bank of Uganda (BOU), Uganda Micro-finance Bank, Stanbic Bank, ABSA Bank, and Bank of Baroda; credit card services such as Mastercard; payments / remittance service providers such as Paytm, Mobikwik, Eko; unsecured small loan providers / marketplaces such as Capital Float, Suvidhaa; Fintech think tanks such as iSpirit; other financial service providers and including young organizations offering innovative financial services leveraging the India Stack architecture. These partnerships will focus on making digital products / applications available to beneficiaries in a manner that takes into account their literacy levels and level of familiarity with technology. This can mean easy-to-use workflows, simplified interfaces and multi-lingual forms. Wherever possible, the project will work with partners to suitably customize the applications for beneficiaries. The project will also explore building customized applications to digitize workflows for activities undertaken by Save42moro members if a suitable off-the-shelf solution is not available in the market. The component will support roundtable discussions, brainstorming workshops with these partners, external experts and other stakeholders to facilitate establishment of these partnerships. These discussions / workshops will be led by a Digital Finance Advisor.