Enviu – Micro Pensions

Social security is a fundamental right of each citizen. The International Labor Organization has identified nine major aspects that should form a part of any social security system; one of them being ‘old age benefits’. In a lot of developing countries there are no (inclusive) social security systems at all. Also, dozens of countries around the world lack a social security net for the informal sector, which often comprises around 70% of those economies.

In 2010 a first Micro Pensions pilot started in India, developed by the Dhan Foundation. Jan Nijssen, board of inspiration Enviu, was involved in this pilot and suggested Enviu to follow up on this first pilot by investigating the possibilities for the concept of micro pensions in other countries. ValuStrat was engaged by Enviu to help them with the strategy for launching the product in Pakistan.

Micro Pension is a unique concept which aims to create a pension plan for the people employed in the informal sector with the help of mobile banking.

Pakistan’s economy grew by 4.1% to $ 245 bn with income per capita growing to USD 1,386 exhibiting an increase of 3.4% in 2014. Regionally, Pakistan has one of the lowest national savings to GDP ratio less than half the level in Bangladesh and approximately one-third of India. Pakistan‘s population is expected to reach 203mn by 2020 and 271mn by 2050. The informal sector plays a pivotal role in Pakistan’s economy, 74% of people employed work in the informal sector.

ValuStrat worked with Enviu to create a business plan for micro pensions in Pakistan. The project includes the following aspects:

  • Economy and demographics
  • Ageing and dependability of the old aged
  • Concept validation of the micro pension product
  • Income distribution and poverty
  • Government policy relating to pensions and non-profits
  • Analysis of Pakistan’s labor force by sector and employment
  • Pensions system comparisons and policies
  • Mobile and mobile banking penetration
  • Existing saving products
  • Business model for the micro pensions
  • Resource Planning
  • Financial modelling and Analysis
  • Market entry strategy