Case Study 12: Kenya National Health Insurance Fund (NHIF) Mobile Money Compendium

As the primary provider of health insurance in Kenya, NHIF's mandate is to ensure that all Kenyans have access to healthcare services. Membership in NHIF is compulsory for all salaried employees, with premium contributions calculated on a graduated scale based on income and deducted automatically through payroll. For self-employed and other informal sector workers, membership is contributory and available at a fixed premium rate of 160 Kenya Shillings per month. Despite high coverage rates for the formal sector, coverage of the informal sector remains low at 16% of the informal sector population. To address this challenge, NHIF has partnered with Safaricom Limited, a leading telecommunications company in Kenya, to provide a flexible and convenient platform for remittance of monthly insurance premium contributions from informal sector populations. The partnership enables NHIF to extend health services to informal sector workers who are not captured in formal payroll systems and whose incomes are often less regular or predictable. The use of the M-Pesa money transfer platform has enabled NHIF to improve access to and utilization of its services. The option to make monthly insurance contributions using M-Pesa has helped to minimize travel to NHIF offices and time spent in long lines away from productive livelihood activities. M-Pesa is particularly useful for NHIF beneficiaries living in rural areas with limited access to NHIF offices. Additionally, by allowing workers to make incremental contributions to their monthly premium, the M-Pesa platform has helped to reduce the frequency of NHIF's penalty charge, which has been a major deterrent to re-enrollment for defaulted members as well as attraction of new members. Since the launch of the M-Pesa payment platform in 2010, the number of NHIF members using M-Pesa to make monthly premium contributions has grown nearly ten-fold from 10,000 to close to 100,000 in 2014. Revenue collection for NHIF grew from 1 million Kenya Shillings per month at the end of 2011 to an average of 35 million Kenya Shillings per month in 2013. The M-Pesa payment system has also made it possible for individuals to submit payments on behalf of others, including extended family members, orphans, and the elderly. To further improve the M-Pesa payment system, NHIF has set an ambitious target of enrolling a total of 10 million Kenyans, with 33% or approximately 3 million comprising the informal sector, by the end of 2014. A media campaign focused on creating awareness of the health coverage plan for the informal sector and the flexible M-Pesa payment option is underway. NHIF is also exploring a bulk SMS offering with Safaricom to send reminders to members about the status of payments, coverage, and important NHIF contact information. In the near future, NHIF plans to introduce scratch cards in fixed increments as another convenient and flexible option for remittance of monthly premium contributions from informal sector populations.