Health insurance through plastics recycling – Soso Care’s model in Nigeria 

In May 2021, GSMA launched the GSMA Innovation Fund for Digital Urban Services with support from the UK Foreign, Commonwealth & Development Office (FCDO). The fund was open to start-ups and early-stage companies providing essential urban utility services who leverage digital innovations to make these services more accessible, reliable, sustainable and affordable. Successful organisations were awarded between £100,000 and £250,000 in grant funding and were provided with technical assistance. Pitches were received from 335 organisations in 43 countries across Africa, South Asia and Southeast Asia, and from these, a cohort of nine organisations were selected. This blog series summarises the key learnings from the grant period.

Soso Care is a health fintech insurance company with an innovative approach to providing health insurance to low-income populations in Nigeria. Households sell their recyclable household waste to intermediaries and recycling processors, and the proceeds are used to pay for Soso Care health insurance premiums.  

The service is delivered through a network of Soso Care agents, who both manage the collection of the waste from households, as well as their insurance policies. Most agents are women from the communities in which Soso Care works. Households have the choice of ‘cash or trash’ when paying for their premiums, and they can also receive cash payments for the waste collection. Three to four kilograms of plastic waste per month provides the premium for the basic package of health insurance, which covers some pharmacy-related expenditures up to $10 per claim. Hospital packages are available with more waste, or by blending cash and waste to pay the premium.  

A person wearing a red helmet and a face mask is seen pushing recyclable plastic bottles into a green machine at a recycling facility. Large quantities of plastic bottles are scattered on the ground around them.

As of the last Demographic and Health survey in 2019, fewer than 3% of Nigerians were recorded as having health insurance. Meaning quality healthcare is out of reach for most Nigerians, or when people do seek care, it can become a devastating out-of-pocket expenditure. These out-of-pocket expenditures account for over 75% of Nigeria’s total health expenditure, the fifth highest figure for any country in the world. Recently the Government of Nigeria signed into law the National Health Insurance Act, which made health insurance mandatory for all Nigerians, with the policy currently being rolled out nationally. At the same time, Nigeria generates approximately 32 million tonnes of waste annually, of which 2.5 million tonnes are plastics, with less than 12% of this collected, sorted and recycled.  

Purpose of the grant and key outcomes  

GSMA supported Soso Care to expand their current offering through developing and launching a mobile app and USSD services, and with funding to open two recycling facilities in the Kaduna and Rivers states. 

The key grant outcomes cover Soso Care’s scaling, the uptake of health insurance and change in recycling behaviour and volumes recycled:   

  • At grant close, Soso Care had over 3,000 direct users, 86% of whom were women. 89% of those users reported they were new to using health insurance, 54% reported that the solution had positively impacted their income levels and 65% of those that took out insurance reported improved access to healthcare.  
  • In a grant endline survey of users and agents, all interviewees reported an increase in knowledge of insurance products. 86% of users reported a significant or slight increase in trust/confidence of insurance products, 13% reported unchanged levels of trust, and one per cent reported a decrease.  
  • Over the course of the project, Soso Care scaled from zero to processing 100 tonnes of plastic waste. Alongside the uptake of health insurance, the model was able to incentivise a huge change in recycling behaviour. The proportion of users reporting ‘never’ or ‘rarely’ recycling fell from 53% to 23%, while the proportion recycling at least on weekly or daily basis rose from 14% to 49%.   

Key learnings from the grant  

  • The digital tools were well received by both agents and end users, though a significant minority of users continue to favour traditional payment methods. 63% of end users stated their payment preferences to be with the Soso Care USSD option or app (46% and 17% respectively), although 38% stated their preference as a bank payment or cash/offline payment. Agent payment preferences followed a similar pattern. Soso Care also first attempted to roll out all app functions at once, but later realised releasing features one at a time allowed Soso Care to gradually onboard agents without overwhelming them, which resulted in better digital engagement by the agents.  
  • The option of using recyclables as insurance premium payments was widely taken up. 82% of end users made their payments using the ‘trash’ option, 12% made payments with ‘cash’ and a further 6% used a hybrid of both. The solution also provided a strong enough incentive to change recycling behaviours.  
  • The model was able to support the agents with a reliable source of income. Of the agents interviewed at endline, 68% reported their incomes as consistent, 52% as ‘very’ and 16% as ‘somewhat’, while 16% reported their incomes working with Soso Care were ‘somewhat inconsistent’. Prior to engaging with Soso Care, 44% of agents reported a monthly income of under NGN 30,000, and 32% reported an income of over NGN 50,000. At grant close, only 24% reported an income of below NGN 30,000 and the proportion reporting over NGN 50,000 had increased to 44%.  
  • Soso Care faced sector and site-specific challenges in entering the plastics value chain. Soso Care are, at their core, an insurance tech company. The recycling operations side of the business are designed to make their products more accessible. The sourcing of land, agreeing the leases, finding the right operational mode for the volumes and location of waste, and the decline in global secondary plastics prices over the grant period all posed challenges. Over the course of the project, and as operations scaled, Soso Care was able to command better plastics prices through selling at larger volumes to those higher up the aggregation process. Soso Care are now looking to export their plastics directly as this will boost revenues. 

Looking forward 

Moving forward Soso Care is focused on scaling, branding, and driving product uptake to reach millions of users. They are exploring further opportunities of expanding collection capacity, exporting recovered plastics, offsetting plastic credit, and importantly an API to trial a franchise model for their technology.  

A small white truck carrying large, bulging bags of plastic bottles drives through a dusty pathway next to a brick wall. A health insurance advertisement featuring a smiling woman is displayed on the wall to the left.

A new GSMA report on circular economy solutions 

The GSMA recently published Making Circularity Work: How digital innovation enables circular economy approaches in waste management’. This report takes stock of how and where digital innovation supports circular economy models in waste management. It presents insights from Soso Care’s experience alongside others from the recently completed GSMA Innovation Fund for Digital Urban Services, as well as insights from other start-ups from across the ecosystem. While global recycling and reuse rates remain grimly low, and waste volume is outstripping population growth by a factor of two, the report highlights some key positive trends supporting circularity. There is growing momentum behind national and global policy change governing waste. In many cases, these changes are market-making for those working towards circular economy approaches. Demand for secondary materials in manufacturing is also rising, particularly those from e-waste in response to the limited global supply of critical inputs. That the waste sector is such a significant source of emissions presents the opportunity for mitigation, and for access to climate finance. Lastly, start-ups working in the waste sector are increasingly being viewed favourably by investors, with series raises in the tens of millions being increasingly common.   

This initiative is currently funded by UK International Development from the UK government and is supported by the GSMA and its members.
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