Juliet Agutu, a domestic worker in Nairobi recently delivered her first child at Pumwani, the country’s largest maternal hospital.  Like many mothers-to-be in the developing world, Juliet was worried about not having the appropriate medical facilities or the money to pay for neonatal or maternal care.   Juliet’s fears are not unwarranted; According to the Kenyan government, only five percent of Kenyans have medical insurance and 56 percent of women put their own life and that of their baby at risk by giving birth at home. The percentage is even higher in rural areas where the high cost of transport to a usually distant hospital contributes to the problem.

Fortunately for Juliet, she heard about a new service provided by Changamka MicroHealth, a local microinsurance provider that assuaged her fears. Changmaka helps families save towards the cost of childbirth by enabling them to purchase treatment packages at pre-contracted prices in various clinics whereby Changmaka smart-cardholders can remit small amounts of money via M-PESA.

Emerging research highlights that savings and insurance are two tools that can be used to solve the financial problems low-income families in developing countries face.  In this light, Changamaka aims to revolutionize access and delivery of primary health care and essential drugs through innovative technology and distribution mechanisms—such as their mobile-based maternal health insurance product. This new product is part of a larger trend of offering sophisticated mobile financial services.  The goal behind this innovation is not only to provide a simple and cost effective solution for health insurance, but also to encourage low-income families to develop a culture of saving, which can then be used to meet any of their needs.  Saving is a founding pillar of an inclusive financial system.

In addition, the increasing cost of accessing medical services is setting the stage for products such as this one, which not only target the Bottom of the Pyramid, but also provide innovative and cost-effective solutions for microinsurance and health providers. One of the many consequences of rising prices is the upwards pressure on insurance premiums, which can result in the exclusion of low-income consumers.  Consequently, insurers are being forced to develop new and affordable products which not only provide new income streams, but also allow them to confront the challenges of integrating new technologies, such as mobile phones, into their business processes, reducing transaction costs and maximizing service delivery

The lesson in Changamaka is not that mobile money is a silver bullet, but it echoes some of the lessons we saw early on in the mobile money industry. The most successful products are the ones that tailor their service offerings to their local population and from a simple business proposition can create immense value in the lives of the people who use them.