In this lesson, we explain Micro Credit, Micro Pension & Micro Insurance and how Mobile Money Agents can offer this service and earn commissions.

Micro Credit provides easy access to small loans for people without the rigors of getting collateral. With your sim card and phone, you are able to access credit. Micro insurance entails providing insurance products to the unbanked. This insurance protects people against risks like death (life insurance), fire, theft, sickness (health insurance), etc. Insurance is time bound, meaning, the insurance company cannot pay the customer premium for the insured risk happening at a time outside the insured period. Micro insurance products are subscribed to by interested customers who pay a specified fee (e.g N1k) on a monthly, quarterly or annual basis. Micro Pension entails providing pension products to the unbanked. Pension is like saving for the future. Micro pension products are subscribed to by interested customers who pay a specified amount (e.g N1k) on a monthly, quarterly or annual basis.

The Micro credit/insurance/pension service is an innovative way of promoting these useful financial services to the unbanked - especially people in the rural areas. WIth this service, these people can have full access to the benefits of these financial services. E.g, they can get quick loans to power their small businesses, get risk protection through insurance, or get pensions saved up for their future retirement. Here is how it works.

  • Any customer who is interested in this service can subscribe to a micro credit/insurance/pension program of an operator by opening an account with that operator through the agent.
  • For micro-credit, the customer will request for the loan through the agent. The agent will then get the customer to complete all the necessary documentations and submit it to the operator on behalf of the customer. The customer will then get his bank account credited with the loan. The customer can then do a cash out of the loan money through the agent.
  • For micro insurance/pension, the customer will open a plan with the agent and periodically come to the agent to pay their subscription fees.

  • Anyone who needs a quick loan is a potential customer of micro credit. This could be an individual or an entrepreneur.
  • Every Nigerian can benefit from subscribing to micro insurance and micro pension products
It is important to note that, at the moment, only customers who have a bank account can access micro credit. This further gives agents an opportunity to open bank accounts for customers who want micro-credit services but do not have bank accounts yet.

  • Educating potential customers about the importance/benefits of the microcredit/insurance/ pension product and convincing them to subscribe to the product.
  • Opening bank accounts (for microcredit customers who do not have bank accounts yet)
  • Opening Micro insurance/pension accounts with operators, for the customers who want these services
  • Following up the micro credit customer to ensure he/she pays up
  • Following up the micro insurance/pension customer to ensure he/she meets his/her regular subscription payments.
  • Keeping a float in their agent wallet with the operator to be able to micro insurance/pension subscription payment requests from the customer
  • Cash in: Collecting cash that the customer wants to pay for his subscription to a micro insurance/pension account. The agent will then credit the customer’s micro insurance/pension account, from his/her own wallet with the operator.
  • Educating the customer on how to make claims and complaints to the operator (insurance, pension or credit company offering the service)

  • For Micro credit:
    • For some operators, the agent earns commission for every credit/loan given through the agent
    • For some other operators, the agent gets his commission only after the customer repays the loan.
    • For some other operators, the agent commission is split into 2 tranches - part is paid when the credit/loan is disbursed, and the balance commission paid when the customer repays.
  • For Micro Insurance/pension, the agent is paid a commission for onboarding a new customer to a micro insurance/pension product. The agent can continue to charge the customer cash-in fees whenever the customer wants to make a new payment into his micro insurance/pension plan.

A Phone/PC/Pad with access to the internet and with the operators app installed.

  • Create deliberate campaigns to encourage people to subscribe to micro credit/insurance/pension plans through you.
  • You can also advertise that you offer these services in the location where you are situated, so anyone interested can walk into your location and ask for the service.

Micro Credit

  • Fair Money
  • RenMoney (through baxi-box, created by capricorn Digi)
Micro Insurance
  • Leadway Pension
  • Cornerstone Takaful

You don't need any capital to start this service - beyond the float you will need to have in your account with the operator to handle cash-in. All you need is a good understanding of the service and the  ability to sell it to potential customers.

  • Having your phone/PC/Tab connected to the internet and with the operators app installed
  • Having enough float income in your account to deposit money into the customers insurance/pension plan account when he/she gives you cash to honor their subscription.

The more micro credits/insurance/pension plan you sell for the operator the more money you make.

Yes! you can start with selling savings/thrift products first and then extend your offerings to other services over time.