AfyaCredit: Lessons from financing healthcare for Kenyan households in the informal sector

October 5th, 2022

The Covid-19 pandemic has had a notable negative economic impact, pushing 2.5 million Kenyans into poverty in 2020 alone. The pandemic has further exacerbated Kenyans’ inability to cope with health shocks.  

According to the 2021 FinAccess Household Survey, only 27% of Kenyans had health insurance in 2019 before the onset of the pandemic. This proportion reduced to 22% by end of 2021.  

Eight out of every 10 Kenyans who had health cover were using the National Health Insurance Fund (NHIF). Women’s access to health insurance is significantly lower than men’s yet they shoulder most of the healthcare burden. 

Figure on access to health insurance 

Figure on access to health insurance

NHIF is a key pillar of Kenya’s universal health coverage agenda. However, according to NHIF, only four out of every 10 accounts remain active. The situation is worse among informal sector workers with a dismal 14% retention rate.  

Financing healthcare is thus a big challenge, with many spending out-of-pocket or foregoing care altogether. For instance, 54% of Kenyans reported going without healthcare in 2021 compared to 36% in 2019 accordingly to the 2021 FinAccess Household Survey. However, the digital revolution in Kenya provides an opportunity to create and deliver solutions to help women and households to meet their health needs.  

In 2019, FSD Kenya and PharmAccess set out to research, develop, and test a health financing solution targeted at low-income households. The research resulted in AfyaCredit, a digital finance product to enable households pay for NHIF premium and healthcare at the point of need. Here is a summary of the process, the lessons that we learned and insights from the pilot. 

Meeting the healthcare financing needs of low-income Kenyans  

Using a human-centric design approach, PharmAccess and FSD Kenya carried out research to understand how low-income households financially deal with health shocks. The research showed that despite the proliferation of digital lending in Kenya, there were no specific health financing products targeted at workers in the informal sector. This led to the design of two digital minimal viable products (MVPs): AfyaCredit NHIF Loan (for already registered NHIF members) and AfyaCredit Treatment Loan for payment of services at healthcare facilities. 

The AfyaCredit MVPs were then refined through a sequence of lean experiments using the lean start-up methodology. This entailed a step-by-step collection of initial insights on the profile of AfyaCredit’s target consumers as well as their behaviour around awareness, enrolment, uptake, and repayment of the two loan products. In each experiment, we developed and tested key hypotheses of both product concepts and iterated based on the findings. 

The AfyaCredit pilot 

We piloted the refined AfyaCredit solutions in a real-life environment between July 2021 and March 2022.  This entailed:  

  • Development of a front-end (USSD) & back-end loan management tech system, including KYC check, eligibility check (based on credit rating criteria), automated SMS journey and live dashboard; 
  • Training and onboarding of 28 participating healthcare facilities (a mix of M-TIBA and non-M-TIBA facilities in both urban and rural areas around Nairobi).  
  • Development of marketing materials (posters, flyers, SMS messaging, and online AfyaCredit micro website); 
  • An SMS campaign reminding patients in the partner healthcare facilities of their premium payment (NHIF members) and AfyaCredit loan repayment deadlines; and 
  • Setting up of customer support line as well as a physical field agent support team for hospital & (potential) client’s sensitization and education. 

About 4,000 loan requests were received and 817 loans were disbursed for both out-of-pocket treatment and NHIF premium. The latter was channelled directly to NHIF and the treatment loans to participating healthcare facilities. 

Lessons from the pilot 

Below are the key lessons and insights from the pilot. 

  • Word of mouth is king. AfyaCredit was a digital product and digital marketing tools were used, but most of those who registered and requested for loans got to know about it from others.  
  • A combination of high-tech and ‘touch’ is necessary for effectiveness. The use of technology alone is sub-optimal for solutions targeted at lower-income and less digitally literate segments of the market. Personal support at various points in the customer journey can engender support and enhance performance. 
  • There is notable demand for value-adding health financial solutions in Kenya.  AfyaCredit was marketed in only 19 facilities in three counties around Nairobi but we received requests for both NHIF premium and treatment loans from all 47 counties.  
  • Effective communication to clients is crucial. Messages such as reminders on loan due dates enhanced loan repayment. Confirmation messages to the clients that the loans had been remitted to NHIF were highly appreciated. 
  • Tailor-made solutions can deliver tangible value to target markets. The NHIF loans which were targeted at active NHIF members had significantly better performance than the treatment loans.  Keeping the NHIF cover active seemed to be a large motivation for the premium loan performance. 

“The AfyaCredit NHIF loan has really helped me in staying ahead with my monthly contribution” (Female, 33 years old, rural small business owner) 

We are currently using these lessons to refine the AfyaCredit NHIF premium financing solution and business model to sustainably enable more Kenyan women and households in the informal sector to access health insurance. This will entail pivoting to a different kind of financial solution and partnering with multiple stakeholders.  



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