WEBINAR - Innovation in Healthcare Financing in Kenya

With the onset of the pandemic, the healthcare scene in Kenya has shifted. Fewer households are willing to pay for health insurance as it is no longer a basic need.

Research shows that households in developing countries spent $148 billion out-of-pocket for healthcare expenses in 2015, and each year 100 million people are pushed into extreme poverty because of the high cost of healthcare. Most Kenyans pay for their healthcare “out of pocket”. When it comes to insurance, only 11% of Kenya’s population have health insurance. Covid-19 has had a continued impact on the same.

How can we help the majority of Kenyan households - many of whom are unemployed, casual, or gig workers - to get access to and afford primary health care?

Spindle Design organized this timely and insightful conversation with experts in the field on the opportunities for innovation and how we can create impactful businesses in health financing.

Wilfred Njagi, Villgro Africa Chief Executive Officer & Co-founder, joined the panel discussion alongside Wanza Mbole, Senior Economic Inclusion Advisor of FSD Kenya, and Alice Machichi, Lead, Digital Health Innovation of PharmAccess Foundation.

Key Challenges

  1. The competing needs in low-income households do not allow them to set aside money specifically for healthcare.
  2. Low-income households have a deep sense of mistrust towards health insurance.
  3. Healthcare is severely underfunded. As a country, Kenya is spending only 4% of the total budget on the health sector.
  4. There is a lack of transparency in terms of accounting on the side of social insurance. NHIF has been in the news for some of the wrong reasons.
  5. Punitive penalties placed on subscribers who fail to pay the monthly subscription are a hindrance to the uptake of health insurance.


  1. The government needs to start prioritizing and allocating more funds towards healthcare. 

“The coping mechanisms we employ lead to catastrophic effects because the disease doesn't wait. The only way out of the vicious cycle is if we start prioritizing healthcare. Governments & households need to start prioritizing healthcare by putting aside money for it. “ - Wilfred Njagi

  1. We need to also change the way the system works. Those who can pay should pay more in order to subsidize the cost for informal workers. 
  2. Hospital providers that accept microinsurance should be lenient and understand that micro limits are low so they should not charge high rates. This will give patients an opportunity to seek healthcare without having to worry whether their contributions have been depleted.
  3. Behavior change is needed. Introduce households to low premium (entry-level) insurance covers like hospital cash, accident covers, funeral covers to increase their trust, then upsell to health insurance from there.
  4. Microinsurance innovations can pull together to become their own underwriters. Alternatively, NHIF could become their underwriter so that they can own their space without having to rely on the corporate insurers.

Pitfalls Innovators Fall into While Innovating for the Low- & Middle-Income Segments

  1. Copy: pasting products from other markets - There is a need to contextualize our solutions instead of copy-pasting our products without understanding whether the market needs them. A thorough market scoping research is necessary. - Alice Machichi

    “If there is any segment which understands value it is the LMIC segment, if they are going to put Ksh 1,000 into your product you better make it worth their while.” Wanza Mbole

  2. Innovating in isolation without looking at what else is out there: There has to be some form of differentiation. In the past we have seen many microinsurance products flood the market with no form of differentiation, this has led to most of them closing shop. In order to scale, study what other options consumers have and see how you can add value.
  3. Team: As you start developing your product, does your team have the passion for not only the start-up phase but also the growth stage?
  4. Business model: You may have a solid idea, but you need to work out your selling point for the growth stage, tweak it for scale and learn from the environment and ecosystem.