- Tangarine delivers; Africa RE underwrites; NAICOM approves
- First indemnity product by butcher community
An innovative scheme leveraging digital footprints and targeting Nigeria’s livestock ecosystem with access to a raft of products in the financial space, including micro-insurance, micro-lending and technology, is reportedly already making breakthroughs in its micro-insurance push.
It is also at an advanced stage in its plans to disburse the first tranche of no-interest lending to a beneficiary, an artisan butcher from its community of insurance contributors, Business A.M. learnt from documents and speaking with people familiar with the scheme.
The scheme is being championed by Malu Specialist Limited, which is working with a network of finance industry operators, including the insurance company, Tangerine General Insurance, Bridgeway MFB, a microfinance bank, and Africa RE, the reinsurance giant. It also has approval from the National Insurance Commission (NAICOM).
Documents on the scheme seen by Business A.M. show an elaborate plan that will initially capture the livestock ecosystem in Nigeria before launching out across Africa. It is a scheme that is also looking to specifically address goals within the United Nations Sustainable Development Goals (SDGs) targets.
It is “Malu Road’s efforts to revolutionise the livestock industry in Nigeria and eventually across Africa,” the company states in an explanatory document.
The documents describe the scheme as “a digital livestock ecosystem that facilitates access to associated value-chain services and creates multi-level stakeholder value for participants in Nigeria’s livestock industry.”
Already active in Nigeria, the designers of the scheme said they have successfully deployed an insurance product to artisanal butchers, which is paid for daily; it is a product delivered in partnership with Tangerine General Insurance, and they further revealed they have an insurance portfolio with NAICOM approval and which is underwritten by Africa RE and provides cover to livestock owners, infrastructure operators such as ranches, lairages and abattoirs, veterinary professionals, state governments and state-approved transport corridors.
The innovative scheme emerged to address challenges seen in Nigeria’s livestock ecosystem, the promoters state in documents.
“Nigeria’s livestock market is undervalued though estimated at N33 trillion (roughly USD 44.5 million at the parallel market rate [of] N740 = $1). Continuing nomadic practices of livestock management, governments failing to leverage technology in conjunction with policies and new legislation, and despite investments made, in physical infrastructure, put in place to modernise livestock practices, Nigeria’s livestock ecosystem market remains undervalued,” they explained. They also found that Nigeria’s livestock ecosystem, particularly its red meat value chain, is challenged by the fact that the trade between artisanal butchers and livestock merchants, which runs into billions of naira, is carried on outside formal banking systems, and note that, “studies identify that informal credit arrangements are operated and continue to exist between artisan groups as a mix of cash payments plus credit repayments over an agreed time without formal intervention.”
Identifying the challenge in relation to insurance, they noted that for the artisanal stakeholder working in Nigeria’s red meat value chain, who are its largest cohort of industry participants, “a lack of access to indemnity protections against financial loss due to livestock condemnation (post-slaughter) and inadequate continuity of care by a vet, for livestock (and having the capacity to request and benefit from vet services without attracting new customer onboarding costs and lacking access to historic livestock and animal care information), remain two of the critical issues limiting the growth of the artisan butcher and artisan livestock merchant.”
These challenges are what this innovative finance and technology framework is being used to address. But in outlining solutions to these challenges, they have sought to address United Nations Sustainable Development Goals objectives that align with the livestock ecosystem. They said there was a need to engage with stakeholders across the livestock value chain, particularly artisanal cohorts, by adopting flexible operational approaches that deliver measurable impact to beneficiaries. “Malu Road value chain services and its associated service areas – Malu Road Insurance Services; Malu Road Micro Lending; Malu Road Veterinary Care; and Malu Road Digital Ecosystem – operated by Malu Specialist Ltd., are made possible by partnering with relevant industry partners to deliver services whilst facilitating and enabling the delivery of several SDG commitments,” they said.
Addressing commitments under SDG1 and SDG2, the scheme is directed to facilitate access to a no-interest lending portfolio and proprietary offline payment mechanisms that help the company leverage existing informal credit arrangements between artisan butchers and livestock merchants, which reduces the cost of buying meat products and moves Nigeria closer to ending hunger. Also, they affirm that with regards to SDG8, the platform creates and promotes decent work for existing and prospective digital merchants of red meat products by leveraging e-commerce capabilities and buyer sourcing built into the ecosystem for red meat sourced from abattoirs enlisted as Malu Road service locations.
The scheme is also addressing commitments under SDG9, the promoters said. “We’ve fostered innovation by developing an insurance portfolio covering the livestock ecosystem and providing financial compensation to artisan butchers for loss because of animal condemnation.
“More importantly, our insurance product is regarded as the first indemnity product adopted by the artisanal butcher community in Nigeria, with premiums paid daily for insurance coverage.
“We also provide a digital infrastructure that offers stakeholders and value chain participants access to resources that guarantee access to services and data across the industry,” they further explained.
They also identified SDG12 and SDG17 as being addressed as building a network of partners allows them to bring to life their vision of responsible livestock ecosystem production and red meat consumption across Nigeria whilst helping partners and governments access and leverage industry data.
Nicholas Allo, managing director, Malu Specialist Limited, told Business A.M. that Malu Specialist Limited operates Malu Road, a digital livestock ecosystem that facilitates access to associated value-chain services and creates multi-level stakeholder value for participants in Nigeria’s livestock industry.
“We have a Pan-Africa outlook and strategy, given [that] several artisanal livestock merchants trading in Nigeria originate from Mali, Niger and Cameroon,” Allo said.
He disclosed that the company has also successfully partnered with microlenders to disburse no-interest loans to artisan butchers.
“Our no-interest lending is spearheaded by Bridgeway MFB and they coordinate our no-interest disbursement and collections. They are also partnering with us to explore introducing offline wallet payment mechanisms and systems to improve the artisanal community and low-income cohorts’ access to financial inclusion.
“We have worked with the veterinary practice, Critters Vet Care, to develop a robust structure for the continuity of care for livestock and offer digital resources that help make the process streamlined.
“Regarding digital, our digital platform will aggregate across the ecosystem enabling different stakeholders access to apps, tools and resources. We are working with Micro Traks, the Visual Earth Group and 9mobile to build and deliver all the digital resources required – mobile apps and user consoles (individuals and government,” Allo explained.
The scheme works as a livestock aggregating service and Allo told Business A.M. that it also presents an opportunity to highlight the need for service providers to think more about the beneficiaries of the services they offer, particularly for artisans and low-income service consumers, for whom the typical approach to service delivery often proves ineffective.
“We are advocating for flexibility in thinking with regards [to] how services can be delivered,” he said.
