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The past decade has seen the emergence of digital platforms, which connect buyers and sellers of goods and services and allow them to seamlessly transact with one another online.
The platform economy is expected to grow to USD405 billion by 2030, more than double from USD204 billion in 2018, with most of this growth coming from emerging markets. insight2impact’s scan of eight sub-Saharan African countries found 277 unique platforms, which employ an estimated 4.8 million individuals. Africa’s digital platforms are developing innovative, tech-driven ways to transform business models and are providing new ways for workers and micro-, small and medium-sized enterprises (MSMEs) traditionally operating in the informal sector to participate in the formal economy.
The unique insights that platforms hold on the needs and behaviour of their workers give them the potential to serve as enablers of financial services.
With an established client base, brand and communication and payments channel, digital platforms hold unique insights into the financial needs of their users and hold the potential to provide innovative solutions to overcome barriers to low formal financial service usage in African markets. Of the 277 platforms, 15% already offered one or more insurance, digital wallet, savings or credit products. These financial services can offer additional value to platform participants, through insurance for risk transfer, consumption smoothing, convenience in making payments and access to productive credit.
Building on Cenfri and insight2impact’s work on the role of insurance in e-hailing platforms, Access to Finance Rwanda (AFR) has partnered with Cenfri and Yego Moto to conduct research with the taxicab/motorcycle drivers to better understand the risks they face and facilitate the development of an insurance product that speaks to the driver’s needs and offers value.
Find out more about the research and its findings through the links below