Unlocking Economic Potential: Digital Insurance Innovation for Township Enterprises 

By: David Gould – CEO: VUM 

The Small- Micro- and Medium-sized Enterprise (SMME) sector is an important growth engine for the South African economy. Yet recent statistics from a comprehensive study by the University of the Western Cape revealed that 70%-80% of local small businesses fail within the first five years.  

In 2023, Santam – South Africa’s largest short-term insurer – launched the country’s first ever digital insurance solution tailored specifically for micro township enterprises, priced between R75 and R195 a month, providing these businesses with financial security and recovery in the event of a loss.  

Currently, most township businesses do not have the financial means to withstand a loss as they cannot access funding. Financiers have no guarantee that debts will continue to be repaid if something goes wrong (such as a fire or theft occurring), forcing many of these businesses to shut down if a loss occurs.   

Santam’s innovative entry-level digital insurance solution will provide a safety net for these businesses, which in turn allows them to sustain themselves and their families, in the event of any unforeseen risks or interruptions. In addition, having access to affordable, quality, formal insurance should make these informal businesses more appealing to financiers, enhance their growth potential and in the long run, their power to create more jobs.  

The Santam Emerging Business Insurance product offers three cover options at different price points. The Starter solution is available at a monthly premium of just R75, the Standard option costs R125 per month and the Premium solution is available at R195. All options offer protection for stock and contents (due to fire, explosion, acts of nature, malicious damage and impact of objects), personal accident (the enterprise is compensated in the event of the owner’s death or permanent disability) and political riot (F4 SASRIA cover), with the value of cover for each risk increasing relative to the package.  

The Standard and Premium cover options also offer cell phone insurance for the business owner’s smartphone, which is an essential tool to ensure business continuity for township entrepreneurs who often run their entire operation from their phone. However, the SASRIA cover is perhaps the most important feature of the Santam Emerging Insurance solution. Each package provides up to R500 000 of cover for special risks such as civil commotion, public disorder, strikes, riots and terrorism. 

Due to many emerging businesses being in rural or informal residential settings with no formal location – which insurers usually need to provide cover – the MoyaApp has a functionality which is able to pinpoint a person with no fixed or accurate address through an identifiable geo-mapped location finder. 

The past year of our partnership with MoyaApp has ensured seamless, data-free access to insurance products, transcending geographical barriers and empowering entrepreneurs in remote or informal settings. This approach not only enhances accessibility but also fosters a culture of financial inclusion, ensuring that no entrepreneur is left behind.