EduSave Launches in Ghana
EduSave - An Innovative Combination of Savings, Insurance and Education Launched in Ghana
MicroEnsure Ghana’s surveys show that 65% of Ghanaians keep extra money at home rather than in a formal financial institution. Of those with savings accounts, 80% of depositors have less than GH¢ 100 (approximately US$50) saved.
As a means of helping to increase the national savings rate, MicroEnsure Ghana developed an innovative savings-linked life insurance product. This new product links savings with insurance benefits: the more money saved in an account, the more insurance earned. With the introduction of savings-linked insurance in June 2011, partner institution Women’s World Banking Ghana experienced a tremendous growth in total saving across all branches: From June to November, deposits under GHS 100 (approximately US$50), the target population for the incentive, increased from GH¢ 750,000 to GH¢ 2.3 million, with the savings-linked insurance product representing the only major intervention during this five-month period.
Now, through the introduction of the EduSave product, MicroEnsure Ghana has partnered with Opportunity International Savings and Loans to add yet another benefit to savings-linked insurance: education finance. In Ghana, parents are required to pay school fees in order to send their children to school. If a parent dies or becomes permanently disabled, money for the child’s education is often one of the first things to be spent. Through the introduction of the EduSave product, MicroEnsure increases the ability of Ghanaian children to attend school in the event of a parent’s death or disability.
EduSave works very simply: a Ghanaian parent saves with Opportunity International Savings and Loans and names one child as a beneficiary. Once the parent saves GH¢ 50 (approximately US$25), one year of free school fees insurance is earned for the child (worth GH¢ 250, approximately US$125). As more money is saved, more school fees insurance is earned, up to a maximum of eight years of school fees insurance (GH¢ 2,000, approximately US$1,000).
The launch of EduSave is an innovative solution to two current problems in Ghana: a low savings rate and the inability of children with deceased or disabled parents to pay their school fees. Through EduSave, MicroEnsure Ghana steps closer and closer to achieving its vision of allowing “all Ghanaians to live with dignity, hope, peace and self-fulfilment.”