Powerstove

Poverty is on the rise in Africa, causing deterioration in social and economic indicators - particularly life expectancy, child and infant mortality, and morbidity due to malaria, TB and HIV/AIDS. WHO estimates that more than 45 % of the population of the African Region fall under the poverty-line definition which characterizes as "poor" anyone who cannot afford a daily consumption rate of US$1. The heavy burden of diseases in the Region causes significant loss in output which in turn accentuates the gap between the actual and potential growth in the Region.

For a 500 million populations that barely survives on less than US$1 per day, avoidability of healthcare services becomes a fleeting illusion. Hence, majority of these poor and marginalized population turned to microinsurance as their last hope. According to a 2015 Microfinance Insurance Centre (MIC) report, there are over 200 microinsurance providers in Africa with a combined portfolio of about USD 800 million. In terms of penetration, over 60 million people are covered, representing slightly over 5% of overall regional outreach coverage. Similar to the banking industry, Africa has lowest microinsurance penetration in the world which is largely attributed to endemic poverty. Based on the World Bank data, the wealth composition in Africa is as follows: (1) only 1% of the African population are considered rich and earn above USD 20 per day; (2) about 6% are middle class, which translates into daily earnings of between USD 10 and 20; (3) while 39% are classified as lower class and earn between USD 2 and 10 per day; and lastly (4) 54% of the population are categorized as poor and earn less than USD 2 a day.

The World Health Organization (WHO) has made it clear that low quality care is expensive and dangerous. Our Primary Health Center (PHC) suffers from poor funding by the Nigerian government. Yet, families that cannot afford to eat 1 quality meal a day has no choice but to visit the PHC for treatments.

People in Nigerian rural communities are geographically disadvantaged and financially do not have the purchasing power or health insurance which grants them access to a physician and care. The community-based health insurance scheme is targeted at rural dwellers who are also mostly poor. They are required to form contributory groups, engage a health management organization (HMO) to manage the funds and negotiate their health benefit plans (HBP) with an HMO. This scheme receives no funding from government. Many challenges have impeded the deepening of the coverage of this target population: poverty of the target population, poor knowledge of the existence of the scheme, poor community organization and participation and poor quality of available health services in rural health facilities. The poor funding of this scheme from the contributors makes the scheme unviable business for the HMOs, limits the value of the coverage they can receive and therefore limits access to care.

Powerstove is using digital, mobile and Blockchain technologies to expand access to financial and health inclusion for rural and underserved people. We provide access to quality health care for two groups of beneficiaries:

1. The Suppliers, who provide all the raw materials (wastes) to our factory. Once we signed them up, they are registered on our Blockchain where an account is opened immediately using their phone numbers. For every waste they provided to Powerstove, they are paid cash equivalent through our app plus for every 1 Kg of waste supplied, US$1 value of micro health insurance (Family Pack) is activated. The bigger the supply, the bigger their health insurance cover package.

2. The Consumers, who buys any of our products has the product activated for them using their bio details and phone numbers with the product’s alphanumeric numbers. The product’s usage is tracked and monitored remotely through the built-in IoT system. The Consumers start earning carbon credits in their digital account based on their usage. Our proprietary algorithm tracks products usages, quantifies and calculates carbon credits amounts to be credited into the digital account of the user. Each carbon funds earned in US$ and have equal value of micro health insurance family pack cover.

Powerstove advantage in solving last mile access to affordable quality health care is strongly based on the use of digital and IT technologies that creates more transparency and traceability of the health system value chain in underserved communities through their proprietary technologies that helps Powerstove to deliver efficient and effective health insurance in underserved populations.

Based on that we developed a Saving-to-Own (S2O) mobile and web app that helps Powerstove waste suppliers to keep track of all their activities - quantity of waste supplied, value of microinsurance available for them to access, available hospital and pharmacy shops to access healthcare, in-app purchase of Powerstove products on credits, history of bio-pellets purchases and most importantly amount of cash payments received for their supplies while the Supplier and their family gets the best health treatment in the best health clinic within their area for free.

In addition, Powerstove creates a digital wallet for every beneficiary on the Powerstove Blockchain, this is to improve financial inclusion and most importantly, transparently tracks all transactions - consumers’ spending on cooking fuel, deposits/withdrawals, stove usage and quantifies how much they have earned from carbon credits, which is paid into their US$ digital wallet. Hence, the more the earn carbon credits, the more their health insurance cover. So families get health treatments for free.

During my recent visit to a hospital in rural Nigeria, I encountered a failed attempt at resuscitating a baby born 12 hours prior, to a mother who could not afford to go to the hospital for antenatal care throughout her entire pregnancy. She was unknowingly diabetic and hypertensive, and her baby was macrosomic (very large). Due to lack of funds, she decided it was in her best interest to deliver at home. After several hours of labour, the baby, stuck in the birth canal, had aspirated an alarming amount of amniotic fluid. It was at that point that she was rushed to a nearby hospital where an emergency C-Section was carried out on her, and the baby brought out almost lifeless. A few hours later, the baby died from respiratory distress, and the woman died of post-surgical complications.

A $1 health insurance premium could have saved both lives. Our microinsurance appears to deliver on the promise of what insurance is all about - protection of households from the adverse consequences of risks. Studies show that this is true both for reducing catastrophic – and hence often impoverishing – spending as well as reducing average out of pocket payment. Our microinsurance provides coverage to individuals without retirement savings or adults in a low-income household. Powerstove microinsurance products are tailored specifically for compensation for illness, injury, or death, and lower valued possessions or assets.

Our microinsurance, functions like regular insurance, and is available for a wide variety of risks for our target populations: The Suppliers, who are mostly married women between the ages of 22 to 55 years of age in urban and peri-urban communities, and The Consumers, people using our products; mainly poor and low-income families in rural and urban areas. Traditionally, women are our users, but husbands purchased the products whom the product is registered with. But for M&E, we relate directly with the women users.

Powerstove was set up in 2017 as a means of organizing poor women in the informal economy. These women constituted 94% of the female labor force but have none of the legal benefits provided to those in the formal economy. Powerstove’s purpose is to mobilize these women to help them gain economic (employment and income) and social (access to housing and health care) security, as well as providing them tools to become more autonomous and self-reliant both economically and in terms of their decision-making ability. Powerstove’s focus on insurance stems from this mission of protecting poor women from the vulnerabilities of everyday life.

A survey conducted by Powerstove in 2017 helped us to recognize the detrimental impact of consumers and family death to our loan portfolio. This helped Powerstove to see an unmet need in an area where no one offered any formal insurance to this market. Powerstove developed into a registered social enterprise in 2018, in a sense as an amalgamation of the labor, women’s, and cooperative movements. This gave Powerstove a broad mandate, almost a responsibility to take the lead and provide a wide range of integrated clean products and services that assists the poor in achieving their goals in line with SDGs.

Among these, Powerstove management recognized the critical nature of insurance to help the poor better sustain life shocks. Thus, insurance became a component of our strategy. Over the last three years, Powerstove has succeeded in mobilizing twenty thousand women as beneficiaries across Nigeria. Since a far larger population are poor and vulnerable, without access to any public or private insurance facility, the potential market for microinsurance services is much greater.

Hence, our management team which is made up of seasoned two IT consultants and Senior Software Developers with 25 years of combined experiences in 21st century technologies like Edge Computing, Blockchain, Internet of Things (IoT), AI, ML and Cyber Security are complemented by three industry-wide business executives with 56 years of combined hands-on experiences. The composition of our team enables us to have 360 degrees understanding of each product development and the expected impacts it will achieve when deployed. Also, because we are user-centric, our team takes feedback of prospective users and early adopters seriously in the project design flow. This has helped us to finally launch and introduce robust partner-agent model microinsurance projects that exceeds our market expectations in terms of social impacts and sales revenue.

20,000

We are seeking for financial, technical and legal supports from MIT's Solve team. Currently, there is a huge opportunity to create new employment in overlooked regions of Nigeria through Powerstove expansion. Dwindling purchasing income and growing interest in clean energy solutions has opened such an immense demand for the Powerstove products in Nigeria markets and beyond that we need to have a robust plan on how to manage both the growing number of suppliers and the consumers. 

With MIT's support, we can invest in more human capital and expand manufacturing facility to better meet demand at scale. This will result in 600+ new jobs, and 200,000+ new households gaining access to clean cooking in the next 2 years and 900,000+ poor and disadvantaged populations gaining access to new healthcare services courtesy of the embedded microinsurance coverage.

This a lot of population to manage monthly and we will need MIT's technical prowess to groom our team on how to manage this new growth of over 1 million people on boarded on the microinsurance system. Also, such growth comes with legal issues that may arise when things are not handled properly. Our team needs to understand better our legal roles and responsibilities in managing this partner-agent model microinsurance scheme. We will also need MIT's support in filing patents for some of our proprietary technologies.

As a for profit company with strong unit economics and a sustainable operations model. Once we establish a presence in the market, we are able to sell more products and fuels to generate revenue continuity, and build financially sustainable operations.

MIT’s support will help Powerstove build economies of scale and establish and expand local manufacturing, which in turn will help reduce costs and improve the bottom line, ultimately helping Powerstove reach financial sustainability faster. MIT’s contribution will be essential in covering upfront investments for expansion and hiring, especially before reaching the breakeven point, in January 2024. After that Powerstove becomes profitable, MIT’s support will be slowly phased out, and at the end of the 2-year period local operations will be independent and profitable.

Thus, MIT’s investment is essential in funding the initial ramp up period. It will catalyse a new phase of growth, helping us build the sales force needed to increase distribution volumes and have a sizeable impact in the clean energy sector.

A poor person cannot pay for any health insurance premium for any future health benefits. The private clinics offer better health services but are expensive. So, providing “affordable” health insurance without commensurate livelihood upliftment is effort in futility. Hence, Powerstove is offering economic opportunities that improves livelihoods of the beneficiaries, allowing them to earn health insurance that covers both for themselves and their families in the best private clinics in their community. The Powerstove plan rewards hard work diligently.

Even with the best intentions of building quality health infrastructure at the community level, families that cannot afford to eat 1 quality meal a day cannot visit the health centers and are left with no choice of a dangerous self-medication at home. So, what we did differently is to improve the financial status of the direct beneficiaries at community level and allow our proprietary digital and IT technologies to seamlessly calculate their health insurance premiums, which they earned Without Financial Contribution. And since they earned these premiums for free, they are willing to use it to access quality healthcare from private clinics, hospitals and pharmacies.

With the lessons, experience and knowledge we have gained implementing this model, we can scale it and adapt to new markets that wants to adopt and implement our model. Today is clean cookstove, tomorrow it can be solar home system or clean water project or even any Fast Moving Consumer Goods. The Purpose and applicability is the same but the products and services can differ while we franchise our technology as a White label solution to microinsurance available for a wide variety of risks, including health, term life, death, disability, and even farming-related insurance risks for crops and livestock.

Our impact goal for the next 12 twelves is to increase our reach to 30 States in Nigeria and employed 600+ new jobs, and provided 200,000+ new households with health insurance cover for their family. 

And by 5th year, we want to expand our technologies and services into 4 countries in Sub Saharan Africa and reach 1.5 million new homes from disadvantaged communities with our lifesaving family health insurance. On the overall, the benefits of beneficiaries’ enrollment in the Powerstove micro health insurance scheme is the reduced net health expenditures for poor and disadvantaged families, decreased informal borrowings for medical costs and improved non-food and overall consumption. Also, the households covered with Powerstove micro health insurance are found to have greater values of assets and savings.

We measure the following key indicators to always check the sustainability of our service offering:

1. Administrative viability is indicated by: The overall quality of monitoring (administrative procedures that monitor all aspects of operations)
2. Functional viability is indicated by: The renewal rate – the number of members renewing membership in the current period as a percentage of the cohort of members covered in the previous period. This shows us if people are actually using the microinsurance package.
3. Financial viability is indicated by: The scheme’s ability to meet short-term cash flow needs; the operating expense ratio (value for money); the ratio of claims paid to earned premium; and the level of asset diversification.
4. Economic viability is indicated by: A break-even or slightly positive net income
5. Effectiveness is indicated by: The utilisation rate (the number of times Powerstove beneficiaries use a particular service in relation to the total number of beneficiaries) and the penetration rate (the percentage of the target population covered by the scheme).
6. Impact is indicated by: The impoverishment rate (the percentage of patients who were impoverished or had experienced a catastrophic health expenditure at the time of enrolment in the scheme); and the population coverage rate (the percentage of the total population to whom the Powerstove microinsurance provides services).

VISION: All poor and underserved people in our community will have quality health care.

MISSION: To advance equity in health care coverage, access and quality for poor and underserved people.

TARGET 1

Reduce the percentage of uninsured in the company's service area from 11% in 2022 to less than 5% by 2028.

OUTCOME

1. Enroll All Eligible people in the micro health insurance marketplace.

STRATEGIES

1. Navigators and other assisters and community initiatives to help eligible consumers enroll in health insurance.

2. Advocacy, outreach and media campaigns to increase the number and types of consumers enrolled in micro health insurance.

OUTCOME

2. Close the Coverage Gap Close the coverage gap through expanded eligibility/availability of Medicaid and other publicly funded insurance options.

STRATEGIES

• Advocacy and lobbying and other forms of citizen and voter engagement to advance policies that close the coverage gap.
• Research and analysis to inform policy, and engage voters and policymakers regarding micro health coverage and population health.
• Partnerships to identify, research, test and create new coverage and care opportunities for those who remain uninsured or under-insured.

TARGET 2

Increase the number of consumers served by the Powerstove health care safety net in the company's service area from 185,000 in 2022 to additional 200,000+ by 2024.

OUTCOME

3. Strong Safety Net Strengthen the capacity of the safety net and community to provide high quality, integrated care for consumers with no or inadequate health insurance coverage.

STRATEGIES

• Advocacy and policy strategies and training programs to expand the micro health care workforce.
• Implementation of strategies to transform care for disadvantaged persons and care integration.
• Connect health care consumers, providers and services to reduce the gap between consumer need and health care.

LONG-TERM IMPACT

Achieve health equity by reducing barriers to coverage and care

OUTCOME 1: ENROLL ALL ELIGIBLE

Enroll all eligible people in the micro health insurance programs

• Strategy 1

Navigators and other assisters and community initiatives to help eligible consumers enroll in micro health insurance.

• Strategy 2

Advocacy, outreach and media campaigns to increase the number and types of consumers enrolled in micro health insurance. 

OUTCOME 2: CLOSE THE COVERAGE GAP

Close the coverage gap through expanded eligibility/availability of Medicaid and other publicly funded insurance options 

• Strategy 1

Advocacy, lobbying and other forms of citizen and voter engagement to advance policies that close the coverage gap.

• Strategy 2

Research and analysis to inform policy, and engage voters and policymakers regarding micro health coverage and population health.

• Strategy 3

Partnerships to identify, research, test and create new coverage and care opportunities for those who remain uninsured or under-insured. 

OUTCOME 3: STRONG SAFETY NET

Strengthen the capacity of the safety net and community to provide high quality, integrated care for consumers with no or inadequate health insurance coverage

• Strategy 1

Advocacy and policy strategies and training programs to expand the micro health care workforce.

• Strategy 2

Implementation of strategies to transform care for disadvantaged persons and care integration

Powerstove is a leading emerging micro mobile health insurance startup using innovative approach to bring health insurance to millions of people who never had it before by enabling them to pay for a health insurance with recyclable waste. We are using digital, mobile and Blockchain technologies to expand access to financial and health inclusion for rural and underserved people.

Through the use of these technologies, Powerstove is solving frictions that is limiting implementing and upscaling micro health insurance through clear transparency and traceability in all the activities from on boarding to accessing health care services especially for the poor and underserved populations.

The Saving to Own (S2O) app (mobile and web) helps Powerstove waste suppliers to sign up, deliver supplies to the factory, tracks payments and value of health insurance and be able to use the premium to pay for health services for him/herself and their family. They can also use the money in S2O app to complete in-app purchase of products either cash or credits.

Also, the Blockchain side helps Powerstove to keep records and track these reconrds transparently without being altered by anyone. Accounts opened on S2O runs on the Blockchain, which tracks consumers’ spending on cooking fuel, stove usage and quantifies how much they have earned from carbon credits, which is paid into their USD digital wallet. The more the earn carbon credits, the more their health insurance cover. So families get health treatments for free.

Blockchain helps to improve the trust in our process and technology within our target beneficiaries. This is because in most Africa countries, people routinely lose money to financial scams and so do not trust insurance, seeing it as an expensive luxury. A poor person cannot pay for any health insurance premium for any future health benefits. The private clinics offer better health services but are expensive. So, providing “affordable” health insurance without commensurate livelihood upliftment is effort in futility.

Hence, Powerstove is offering economic opportunities that improves livelihoods of the beneficiaries, allowing them to earn health insurance that covers both for themselves and their families in the best private clinics and pharmacies in their community. The Powerstove health insurance plan rewards hard work diligently. Our beneficiaries pay with waste not money as insurance premium, therefore enabling thousands of Nigerians to access quality medicare across over 1,000 hospitals.

Most women and physically challenged persons, who live in most Nigerian communities, have limited access to formal education and, employment. They also face barriers in gaining access to land, water, labor, capital, technology, and other resources. However, at Powerstove, we train these persons to become entrepreneurs and change agents on the issue of clean energy which is at the centre of community development and social inclusion. In our inclusive hiring policy, marginalized and disadvantage women play a central role in our operations and make up most 65% of our urban sales workforce involved in the business day-to-day activities.

We give high priority to hardworking, experienced women headed households in all of our recruiting process, without compromising on quality and dedication. A 12 months’ data report from the existing beneficiaries of our micro health insurance scheme, shows that women makes 81% of the participants while poor income women earning less than $1.5 per day makes 59% of these beneficiaries.

Within the humanitarian communities, we place priority to displaced and returnee before host communities, this is structured to ensure that host communities does not have unfair advantage that will deteriorate the health and income level of the visitors (returnees and displaced). And 91% graduates of our ambassadorial program are women, who were excluded from decision-making in their community, but through our program have gained the opportunity to become community leaders and members of the new groups of Powerstove Ambassadors and have joined forces to share best practices and lessons learned. To date, 1,683 women and persons with disabilities have been empowered as Ambassadors.

Since our beneficiaries uses waste to pay for health insurance benefits, we make money from other sources to fund these health activities and the includes:

• The sales of our different range of clean cookstoves 
• Recurring sales from our bio-pellets (whose waste raw materials are supplied by women and used as insurance premium)
• The sales of accessories
• Savings-to-Own: where prospects incrementally save money to buying and owning our products
• Carbon Credits

Powerstove aims at making life changing technologies affordable to most poor and low-income families. To scale our impact, we position our bio-pellets as the cheapest in the market. Although, bio-pellets are the cheapest in the market, we maintain 80% margins out-of-which 10% of the margin serves as insurance premium for women waste suppliers.

Powerstove has strong unit economics and a sustainable operations model. Once we establish local market presence, we sell our products to generate revenue continuity and build financially sustainable operations. Grants support helps finance Powerstove’s R&D, build economies of scale, and establish local manufacturing in new markets, which helps reduce costs and improve the bottom line, ultimately helping Powerstove reach financial sustainability faster. Grants contribution is essential in covering upfront investments in new product development, market expansion and hiring, especially before reaching the breakeven point. And after that Powerstove becomes profitable, Grants support will be slowly phased out, and at the end of the 2-year period local operations will be independent and profitable. Grants investment is essential in funding the initial ramp up period in new markets. It will catalyse a new phase of growth, helping us build the sales force needed to increase distribution volumes and have a sizeable impact.

Powerstove successes have been anchored around having strong partners that believe in our vision and technologies. And these partners have brought funding, technical supports, mentorship and market linkages that have since geometric growth of Powerstove in past few years. We have secured more than US$1.2 million from our partners in terms of grants, convertible notes, repayable grants, debts and equity. Some of these partners are Mercy Corps Nigeria, AllOn, USADF, AFD, GreenTec Capital, GSMA, Cisco, Tony Elumelu Foundation, Realize Impacts, Charm Impact etc.