By Samuel LARTEY (Prof)
In a landmark move that underscores the growing intersection between financial technology and social security, MTN MoMo has partnered with Sanlam Allianz Life Insurance Ghana Ltd and aYo Intermediaries Ghana Limited to launch a comprehensive life insurance package for all MoMo agents across the country.
This initiative, unveiled in March 2024, is set to revolutionize Ghana’s insurance landscape, financial inclusion efforts, and economic resilience.
With over 180,000 MoMo agents operating across Ghana, mobile money services have become the lifeline of the country’s informal and small-scale business ecosystem. By providing free life insurance coverage, without extra cost, this initiative not only secures the livelihoods of MoMo agents but also strengthens the broader economic framework.
Understanding the Insurance Package
The annual renewable insurance policy is designed to protect MoMo agents from life’s uncertainties. The package includes:
- Permanent and Total Disability Cover:
Financial assistance for agents unable to work due to life-altering disabilities.
- Temporary Total Disability Cover:
Support for those temporarily unable to earn due to medical incapacitation.
- Critical Illness Cover:
A safety net for severe conditions such as stroke, cancer, heart attack, kidney failure, major burns, and organ transplants.
- Accidental Medical Reimbursement:
Compensation for medical costs incurred due to accidents.
- Hospitalization Benefits:
Daily cash support for medical expenses.
- Death Benefits:
Financial relief for the families of deceased MoMo agents.
This comprehensive coverage ensures that MoMo agents can continue operating in a sustainable manner, even in the face of life’s unexpected challenges.
Boosting Insurance Penetration in Ghana
One of the biggest challenges in Ghana’s financial sector has been the low insurance penetration rate, which stood at just 1% of GDP in 2023, according to data from the National Insurance Commission (NIC).
Comparatively, South Africa boasts an insurance penetration rate of over 12%, while Kenya has surpassed 3%.
This new partnership could play a pivotal role in increasing insurance adoption, especially among Ghana’s vast informal sector, which constitutes about 80% of the workforce.
By embedding insurance into MoMo’s financial ecosystem, MTN is effectively creating a gateway for financial security, driving trust, and familiarizing individuals with the benefits of insurance coverage.
Furthermore, this initiative aligns with the Government of Ghana’s National Financial Inclusion and Development Strategy (NFIDS) 2018–2023, which aims to increase insurance penetration to at least 5% by 2025.
If successfully implemented, the MoMo agent insurance scheme could serve as a model for other informal sector players, such as market women, transport operators, and artisans, further accelerating Ghana’s journey toward universal insurance coverage.
Economic and Social Benefits for Ghana
The impact of this initiative extends beyond the MoMo agents themselves. It carries significant benefits for businesses, the government, and the broader economy.
For MoMo Agents and the Informal Sector
Financial Protection:
Agents, who often rely on daily commissions, will no longer be left vulnerable in times of illness, accidents, or death.
Increased Work Motivation:
Knowing they have insurance coverage, MoMo agents can focus on their work with confidence.
Reduction in Poverty:
Many families fall into financial distress when the breadwinner is incapacitated. This initiative provides a safety net against such risks.
For Businesses and MTN Ghana
Greater Business Stability:
MTN benefits by ensuring that its primary agents, the MoMo vendors, remain in operation, reducing agent turnover and service disruptions.
Brand Loyalty and Trust:
Providing free insurance fosters stronger agent loyalty to MTN MoMo, securing its dominance in Ghana’s mobile money sector.
Increased Transaction Volume:
Healthy, financially secure MoMo agents can serve more customers, thereby boosting transaction volumes and revenue for both MTN and partner banks.
For the Government of Ghana
Enhanced Financial Inclusion:
By embedding insurance in mobile money, the government moves closer to achieving its financial inclusion targets.
Reduced Healthcare Burden:
The hospitalization and critical illness benefits ease the financial strain on Ghana’s National Health Insurance Scheme (NHIS).
Job security and economic growth:
When MoMo agents are insured, they are more likely to stay in business, thereby maintaining employment levels and contributing to GDP growth.
Real-World Impact: A case study from Kenya
Ghana is not the first country to embed insurance into mobile money. In Kenya, Safaricom’s M-Pesa partnered with local insurers to introduce M-Tiba, a mobile health insurance service. By 2023, over 5 million Kenyans had signed up for M-Tiba, proving that mobile-driven insurance models significantly increase insurance penetration and financial security.
Ghana’s MoMo insurance program could achieve similar success, considering the country’s high mobile money adoption rate. As of December 2023, Ghana recorded GH₵ 1.8 trillion ($150 billion) in MoMo transactions, according to the Bank of Ghana, showing the massive potential for digital insurance solutions.
Challenges and the Way Forward
While this initiative is promising, certain challenges must be addressed:
- Awareness and Education:
Many MoMo agents may not fully understand their entitlements. MTN must engage in aggressive sensitization campaigns.
- Claims Processing Efficiency:
Ensuring seamless and quick claims processing is crucial to maintaining trust in the insurance scheme.
- Sustainability and Expansion:
The initiative should be extended to include other informal sector workers, ensuring broader economic coverage.
Conclusion
The partnership between MTN MoMo, Sanlam Allianz Life Insurance Ghana Ltd, and aYo Intermediaries Ghana Ltd is a groundbreaking move toward financial security for Ghana’s informal workforce. This zero-cost insurance package is a game-changer for financial inclusion, insurance penetration, and economic resilience.
As Ghana strives toward achieving a more financially inclusive and economically stable future, this initiative sets a powerful precedent for how digital financial services can be leveraged to enhance social security, economic growth, and national development.
With MTN MoMo leading the way, Ghana’s mobile money ecosystem is not just about sending and receiving money anymore, it’s about building a safer, more secure future for millions.
