In sub-Saharan Africa, over 90% of the population is not covered by any pension scheme or retirement saving. With the number of people over 60 set to triple by 2050, this issue is bound to become enormous. Enviu and People’s Pension Holding (PPH) are determined to provide the opportunity to save towards ones future for the informal sector. PPH, co-founded by Enviu in 2015, offers pensions to the informal sector in Ghana. The company is now a sustainable, proven, and successful business, gaining traction in the Ghanaian market and serving a growing participant base. With the ambition to reach as many informal workers in Africa as possible, it is time to increase PPH’s impact exponentially by replicating to East Africa. Starting in Rwanda, with the fantastic support of Mastercard Foundation.
A market, and impact opportunity
Despite a massive market and significant impact opportunity for accessible pension products, there are only a few private companies in sub-Saharan Africa that have deployed a pension product specifically designed for the informal market: For many there are virtually no retirement saving product options.
Where families/communities used to take care of the elderly, demographic changes, urbanization, and other factors are breaking down these informal care systems. People literally have to work until they die. PPH’s mission is to fill this gap. They developed a solution specifically designed for the informal sector through which families can save during their working life for the period after retirement. This prevents old-age poverty and reduces the burden of children to support their parents. Younger generations will have more financial room to invest in their own future (business, or education of their children).
A big step to Rwanda, a small step towards financial inclusion for all
Since the vast majority of the informal sector is involved in agriculture, PPH’s solution is designed for and targeted towards the rural smallholder farmer. Pension contributions are flexible and can be made on a daily, weekly or monthly basis matching income cycles. This level of flexibility is used by farmers who typically pay a larger amount a couple of times a year in the harvesting seasons and smaller (or even no) amounts throughout the rest of the year.
In Rwanda the market size of farmers is 5,4 million people, employing around 75% of the workforce. Showing the same relevance and opportunity for PPH’s solution as in Ghana. The coming years PPH wants to work together with Mastercard Foundation and the Rwandan government to replicate the success of PPH in Ghana to Rwanda.
Piloting in Rwanda will bring PPH new insights with respect to how to develop the business, grow the market and motivate customers to consistently save. The market dynamics in Rwanda differ from Ghana. Rwanda is much more digital, and of course contains a different culture. This will add value to the Ghanaian subsidiary of PPH and to the larger ambition of scaling our solution to the rest of Africa!
Together is more: Mastercard Foundation Fund for Rural Prosperity
The goal of Mastercard Foundation Fund for Rural Prosperity is to enable 1 million poor people in rural Africa to have access to appropriate savings, credit and insurance products and services. The Fund aims to help people move out of poverty by improving access to financial products and services that increase their income, improve their resilience, and lift their communities.
According the Fund, the 2017/2018 rolling competition was one of their largest in its efforts to find and support innovative and scalable financial products and services that improve the lives of poor people living in rural areas of Africa. Out of thousands of applications, People’s Pension Holding made it to the top three in the third phase. We are very excited Mastercard Foundation is recognizing this entrepreneurial company with their support.
Enviu, PPH and Mastercard Foundation share the passion and ambition to make financial products inclusive for all, and hereby create massive impact and transform lives for the good. We cannot build this sector alone!