Malian insurtech startup OKO Finance has helped many rural farmers to access crop insurance for the first time ever. Founded in 2017, OKO develops affordable mobile-based crop insurance products to provide smallholder farmers with the financial security they need, regardless of unstable climate trends.
CEO Simon Schwall, spoke to ITBusinessDirect about their plans and activites, here is the conversation
What is the story behind OKO Finance?
Before starting OKO I worked for a very successful micro-insurance provider called BIMA. I was their local CEO in Papua New Guinea and Fiji and brought affordable life and health insurance to hundreds of thousands of people who were previously unserved. But in 2015 a severe drought affected the highlands of Papua New Guinea, affecting massively the local population. Our service was not covering agriculture, and I felt that I had a responsibility to design a solution for this situation, since we had found a way to distribute insurance efficiently. But BIMA was specialised in health, so I left to create OKO, and bring affordable crop insurance products via mobile to the unbanked populations around the world.
I couldn’t do this alone so I searched for talented individuals who were sharing the same vision and I found Shehzad Lokhandwalla who was then working for the One Acre Fund in Uganda. He liked the idea and brought his expertise in mobile software development to bring the concept to live.
Who/what gave you the motivation to launch the company?
When I left Papua New Guinea I moved to Tel Aviv, in Israel. It is known to be the “start-up nation” and indeed I saw there that there were a lot of entrepreneurs, many incubation programmes and tools to help create companies. I also connected with the team of Lumos, who successfully brought Solar Pay-as-you-go solutions to Nigeria. A member of their team (Daniel Ben Yehuda) encouraged me to launch my company. Knowing that I also had the support of my wife to fulfil my ambition, I decided to take the risk of becoming an entrepreneur.
What is the OKO Finance doing differently from its competitors?
Most insurance companies are not serving smallholder farmers. There are some other start-up companies that are working on similar concepts, but all of them face the challenge of bringing it to scale, which is necessary to be profitable given the small margins generated. My experience at BIMA taught me how to leverage the mobile penetration and quickly reach a large user base so we developed unique partnerships and tools to allow anyone to register with their phone, even if they are not connected to the internet. It is our ability to both design insurance products and distribute them that makes us unique.
What is the biggest challenge in running the start-up?
Our biggest challenge is linked to the population that we are targeting. Smallholder farmers are difficult to reach, have limited financial education, are sometimes illiterate and have a limited purchasing power. So most of the tools that are used today to distribute services (mobile applications, social media, credit card payment, etc.) are not applicable to our audience. We need to be very creative and always put ourselves in their shoes to understand how to reach them.
At the moment, how do you measure your company’s success?
Our success is closely linked to our ability to distribute insurance to a large number of customers at a rapid pace. But this was difficult to measure until now as we were working on limited pilots. This will change in the coming months. But for now our success comes from our ability to partner with important players: insurance companies, agricultural industries but also central banks are asking us to bring our solution to their markets which shows that we are doing something right!
How are you utilizing the use of internet and technology effectively?
We take full benefit of the “open data” opportunity. Weather information for example is freely available online, as well as maps and satellite imagery. We combine all of this to analyse risks and monitor fields remotely and bring new insurance services. We also leverage the high penetration of mobile phones and mobile money accounts to break the usual obstacles linked to cash collection for premium and claim payment.
Any words of advice to the upcoming startup businesses?
Bring your solution to your customers as soon as possible. Bring customers on-board who can tell you what they liked, what they really need and how they want to use it. And make sure you don’t collect only their opinion (in a survey) but also their actual usage and their willingness to pay. Everyone will give you advice on how to run your business, but only your end customer’s opinion matters in the end, so listen to their feedback very carefully and incorporate it into your product design.