Women selling fruit and vegetables in Mali
2019-11-28

OKO discusses FinTech showcase win & potential market expansion

 

“Winning the FinTech showcase is especially rewarding because this award comes from regulators and it validates the idea that OKO is also supported by regulators and can have a real impact on financial inclusion” OKO Co-founder and CEO Simon Schwall.

Crop insurer OKO beat out nine worthy competitors to take home the top prize at the first-ever FinTech Showcase during 2019 AFI Global Policy Forum (GPF) in Kigali, Rwanda. Simon Schwall, co-founder and CEO of OKO, recently spoke to AFI about the win, what it means to OKO and possible expansion into new markets.

OKO provides crop insurance to smallholder farmers in Mali using satellite imagery and weather forecasting to simplify and automate claim management. It connects to mobile payment platforms, weather information providers and distribution tools, allowing farmers to be compensated instantly when specific thresholds are reached, such as insufficient rainfall or extreme temperatures.

AFI: Congratulations on winning AFI’s first-ever FinTech showcase! How did you feel when you won?

Schwall: I was super happy that we won. At the time, I wasn’t sure who would win because everyone had good solutions, and some were even more advanced than OKO in terms of how many customers they were serving or in how many markets they are already implemented. It was a surprise that I won.

AFI: What does the winning the showcase mean to you and OKO?

Schwall: I think that winning the FinTech showcase is especially rewarding because this award comes from regulators. It validates the idea that OKO is supported by regulators and can have a real impact on financial inclusion. It was really valuable to receive this recognition. Also, I have a habit of coming in second place, so it was good to see that I could successfully pitch the product!

AFI: When you were interacting with some of the very senior global regulators, including central bank governors, what were they most interested in learning about OKO?

Schwall: Most of the regulators who came to talk to me were from Latin America, which was surprising because we mostly operate in Africa. I was asked a lot of questions but mostly on whether OKO could be replicated outside Africa, what kind of farmers OKO targets and what communication and distribution channels we use.

AFI: How did you respond?

Schwall: Since OKO uses mobile phones, it can be replicated in most places. Anyone with a mobile phone can access OKO. Many places already have mobile money solutions, so that’s something that is quite replicable.

AFI: Did regulators raise any concerns about OKO?

Schwall: Some asked about how we make sure that there is no fraud and that what we insure is correct. We don’t visit the farmers on site. We rely on weather data, so farmers tell us where they are and what they grow.

To ensure that there is no fraud and that we compensate the farmers according to what they experience, we explained how the system worked and how perimetric or index insurance works and the precision of our data. We exposed them to new ways of doing insurance and how to eliminate fraud by using data that cannot be modified or manipulated. Also, we educated the regulators on new digital innovations, including those that make digital distribution possible.

AFI: What did you gain from these exchanges?

Schwall: I got to connect with regulators who are not in my geography. Regulators from Latin America, particularly Honduras, Paraguay and Ecuador, came and talked to me. They were interested in bringing OKO to their markets, which gives me potential leads for new market entries.

We talked about ways that they can support me, like having a regulatory sandbox where I can test solutions. They shared with me their financial inclusion growth so that I can see where I can align with those figures and find solutions to reach their targets.

AFI: That’s great! Do you think you’ll follow up on any of these leads?

Schwall: Definitely. We need to show that our solution doesn’t only work in Africa but can work in many markets. We have had the opportunity to enter new markets but being supported by central banks is one of the best possible ways to do this. They have objectives to reach and we can help reach them. they can help kick-start a project.

AFI: What about the other FinTech finalists? Do you see any future collaboration with them?

Schwall: We discussed and shared a lot of experiences, which was very positive because we face the same kind of problems. For example, PinBox introduced me to some players in Rwanda that help with microinsurance. We also talked about insurance with Yego because we don’t do travel, life or health insurance and they were able to connect us with people who offer that. So, it’s not direct collaboration at this stage but more mutual help like helping understand their markets, sharing good practices and keeping in touch in the long run in possible help and collaboration. With Smart Solutions, their platform can be used in many different ways, so we’ll continue discussions with them.

AFI: The next FinTech showcase will be held at the 2020 AFI GPF in Jordan. What advice can you give other FinTech innovators who want to apply?

Schwall: One thing that I noticed is that we, as FinTech innovators, tend to be a bit in our own bubble. We use jargon that makes sense to us but not necessarily to more traditional players, like regulators. One piece of advice would be to make sure that your solution is presented in a way that is easy for anyone to understand and make a visible impact. Also, put yourself in the shoes of a regulator to understand what their challenges are and see how your product can solve them. It could be for customer education, distribution or compliance to international standards. Understand the challenges that they face and your direct impact on these challenges.