KAROPAY

Our product M- Soma, an online saving platform, targets parents who are keen on their children staying in school. Any parent or guardian who does not want his/her child to miss class is a potential client for M-Soma. 90% of parents in Kenya, which is almost all, are keen on the education of their children. This is the size of our market. Financially speaking, the size of this market is ridiculously huge, our studies show that half a trillion Kenya shillings on average is paid annually in school fees. If 90% of parents are willing to plan for their children's education and 42% of them do not have the means to save, this translates into 190 billion Kenya shillings as the current market size corresponding to how much is currently being saved for education in Kenya.

As a result, at Karopay we hustle every day with one goal in mind. We strive to keep students in school. All we do is channeled towards this goal. Our estimations show that 76% of students have missed at least 19% of their academic year due to lack of school fees or persisting illness, at one point in their learning. Statistics show that increasing access to quality healthcare for students by just 12% can increase class annual attendance by close to 31%. Backed by these numbers, our specific goal as we commence our operations as a firm is to ensure students can access the education that they prefer and that all students access quality healthcare. 

Through our operations and product, we bridge the learning gap for the underserved children between ages 2 to 12 by:

1. Providing a unique savings platform coupled with a group life insurance policy for all parents. The funds are restricted to finance education for kids hence children between ages 2-12 can have uninterrupted learning.
2. M-soma establishes a valuable safety net to protect the educational livelihood of children. M-soma is a savings plus insurance scheme to ensure that the death of a parent does not mean resetting the cycle of poverty. Children of the deceased will therefore be able to access education without financial constraints for at least a year as they try to access alternative solutions.
3. M-soma allows savers to qualify for school fees insurance, with as little as KES 100 saved for school fees, and will ensure that children stay in school for a year or more after the death of their parents while they try to access alternative solutions.
4. Under M-soma (In the final stages of development) when a parent saves an amount more than KES 1000 cumulatively, they receive a no-cost insurance cover for their children's education. This amount is redeemable should they die or become permanently disabled. As the parent saves more, the education insurance rises accordingly.
5. Our research showed that many parents can not afford school fees because the lump sum amount (term fees) is way greater than what many parents can afford. School fees are lighter and more manageable when broken down into daily or weekly expenses. Since M-Soma provides a platform for parents to save daily, weekly, monthly, etc, they will easily meet the required fee amount termly.

Given the above, parents would consistently keep their children (aged 2 to 12 and beyond) in school while in good health with much ease of meeting the financial requirements.

We co-designed the product with school heads that we were already working with on the existing products. All of them were parents and thus understood the pain points from a parent's perspective and were crucial in designing the product. 

Our main activities are: 

1. Facilitating and fostering savings for parents.
2. Ensuring that students still go to school in cases where the person who paid school fees dies or becomes permanently disabled.

Output

1. Parents afford to consistently keep their children in school. 
2. Reducing the rate of school dropouts due to financial constraints. Parents, guardians, or students have a window to seek alternative sources of finances.

Short term goals

1. Increasing literacy levels in communities. 
2. Increasing school attendance 

Long term goals

1. and 2. Increasing standards of living, decreasing crime, increasing productivity, increasing innovations, decreasing famine, increasing awareness, increasing promoting healthy lifestyles. 

Currently, we are on the third level of the five standards of evidence. We refer to several studies that have implied that restricted usage of saved funds is more effective in ensuring that saving goals are achieved. A case study for us was M-Tiba. This product involved users locking funds specifically for healthcare expenses at accredited medical facilities. This has since gotten over 4000 users whose accessibility to proper health care has drastically increased. Studies also show that many parents sell sources of income to afford school fees which allows the student to stay in school momentarily as the family sinks into poverty and works to acquire their income-generating asset again thus an unending cycle of poverty in households. 

Using our learning management system, we track class attendance and student performance. By comparing the saving culture of parents and metrics that estimate the amount of learning that is taking place, we can accurately measure correlation and causality.

Converting school fees into daily expenses for parents with irregular income/expenses through a platform that only allows withdrawals towards education

LEAP fellows will help us address various research topics that would enable us to make informed decisions strategically namely:

1. The Impact of M-Soma products on beneficiary families i.e education status of the children, health status, and general well-being of the individual members.
2. Analysis of parents' habits towards saving for education purposes. This will be in terms of frequency, consistency, and amount.
3. Application of Artificial intelligence and machine learning to learn our customers' behavior hence predicting the credit risk we are likely to encounter.
4. Alleviation strategies to help reduce default risks.
5. The impact of macroeconomic factors and natural calamities on insurers.
6. Business continuity planning in case of a disaster, pandemic, or natural calamity.

Potential deliverables that would be useful to our organization as outputs of the LEAP sprint include:

• Research analysis and recommendations on the above listed topics.
• Comparative analysis with recommendations of our target market on scaling (Uganda and Tanzania).
• Looking into our internal processes and helping align areas with deficiencies that may require professional input.

The successful outcome of this project will help us achieve strategic scalability, efficient running of internal processes, carrying out professional research which would be inclusive of recommendations and excellent mentorship to the research and development team. Hosting the LEAP project will enhance our organization’s 5-year plan by enabling us to make informed decisions and run effective internal processes which will translate to timely scaling thereby serving a larger market and causing more social impact to the community.