Across Africa, value consumers—individuals earning modest incomes but with rising aspirations—are shaping new demand trends for goods and services. However, while industries like fintech and retail are responding rapidly, healthcare financing remains an underserved market despite enormous consumer appetite.
According to our 2024 research on spending habits in Kenya, access to an inclusive healthcare financing model is a top priority for consumers earning between Ksh. 6,000-24,000 (less than $250) per month.
The challenge? Traditional financing structures do not align with the income patterns and financial behaviors of this demographic. But with the right innovations, a sustainable, inclusive model for healthcare financing is possible.
- Healthcare is a Top Financial Priority
For low-income earners, saving for medical emergencies is the number one motivation to set money aside. Despite financial constraints, consumers aim to save between Ksh. 1,500-2,000 ($10-$15) per month specifically for healthcare. However, irregular earnings make this challenging.
- Self-Financing is the Most Common Strategy
Due to a lack of structured financing options, individuals resort to:
- Personal savings
- Borrowing from family and friends
- Pooling money from informal savings groups (chamas)
- Employer assistance (where available)
This reliance on self-financing creates financial instability, especially during medical emergencies.
- Income Irregularity Limits Healthcare Access
Most consumers in this segment do not receive a fixed salary. They earn daily, weekly, or in unpredictable cycles, making it difficult to commit to traditional health insurance premiums. This irregular cash flow often leads to delayed medical care, financial distress, and poor health outcomes.
- Community-Based & Digital Solutions Offer New Opportunities
Consumers are already leveraging community-driven financing models to meet their healthcare needs. Examples include:
- Chamas & informal self-help groups pooling savings for healthcare.
- SACCOs & microfinance institutions offering small loans to customers
- Churches & community-based initiatives providing medical assistance.
Additionally, mobile wallets are transforming savings behavior, making flexible, small contributions possible even for those with irregular incomes. This presents an exciting opportunity for mobile-based health savings products.
Despite these positive developments in mobile wallets and flexible digital savings, adoption of healthcare insurance is still a cautionary tale for value consumers. The idea of paying premiums and “losing all that money” if one has no need to access medical services sounds like a bad deal.
Creating health investment savings products with incentives for long-term contributions and monetary rewards for un-utilized premiums could be the key to promoting uptake among cash sensitive consumers.