In business, survival depends on continually rethinking how to better serve customers by identifying their needs and demands. These services are all great examples of how innovation can lead to the creation of new products and services that make a social and economic impact.
Originally the brainchild of Bangladeshi Nobel Prize-winning banker and economist Muhammad Yunus, microfinance is an excellent example of how to use existing financial solutions to empower the world's poor. Over the past few decades, microfinancing has evolved into a strong industry and additional financial services - such as microsavings and microinsurance -and have emerged as potent complements to loans. These products tend to be much less costly than traditional offerings and so financial protection can be extended to a much wider market than previously thought. Microinsurance products vary in type and structure but are generally very scalable and cost-effective to administer.
The Microinsurance Opportunity
According to ILO and Munich Re Foundation'sProtecting the Poor report, the number of people covered by microinsurance rose to nearly 500 million in 2012. The report also shows that 80 percent of people covered by microinsurance live in East Asia, Latin America, Africa, and India - which alone accounts for 60 percent of the global microinsurance market.
Building Customer Loyalty
In many parts of Africa, Latin America, and Asia, it is common for customers to carry multiple SIM cards and even different phones - as a way of always finding the cheapest rates available to them. Customer loyalty, therefore, is relatively low in these areas. I strongly believe in the power of offering targeted, relevant services to reduce churn and expose new revenue sources. In his article about mobile financial services in Ghana for The Guardian, Mark Tran explains that, "mobile phone companies are offering insurance - premium services and free of charge - to keep customers loyal. For microinsurance companies, it is a chance to reach millions of very poor people - those in dire need of a financial cushion when things go wrong, whether through illness or damage to assets."
Leverage Existing Assets
Increasingly, businesses from differing sectors are creating new partnerships to better serve to the same customer base or extend their own client access. In the case of microfinance, MNOs can help to bridge the gap between traditional financial institutions in mature markets and customers in developing countries. In the regions mentioned above, intense interest from the insurance sectors, strong government support, and appropriate distribution channels are helping lead the microinsurance revolution.
There's no need to reinvent the wheel when it comes to rolling out new services. Once customer demands have been identified, partnerships can be initiated to provide targeted, relevant financial products that benefit the entire value chain.
Rajiv Bhatia is a mobile specialist and international sales and marketing executive. He has been working to make new business happen across Europe, the Americas, Asia and Africa for more than a decade. For the last 6 years, Rajiv has been involved in mobile commerce ecosystems working around apps, mobile advertising and most recently payments and money. In his career Rajiv has worked the mobile value chain from climbing base station towers to selling mobile ad inventory and now supporting financial inclusion and payments. He is passionate about the impact mobile technology is having around us improving lives, creating new businesses. Rajiv is based in Stockholm, Sweden, and spends most of his working time meeting people across the industry in Europe, Middle East and Africa.