The short-term insurance market is the scheduled next step for fintech company Mama Money. With about 20% of the remittance market in South Africa and a banking product for foreign nationals that attracted more than 10,000 users in three months, Mama Money is eyeing financial products for migrants.
“Our customers have asked us for insurance, specifically funeral insurance because of the repatriation costs if someone passes away in this country,” says Matt Coquillon, co-founder of Mama Money. “We’ll partner with an insurance company on that.”
Since Mama Money’s first transfer of money, to Zimbabwe in 2015, one of its principles has been partnerships and these extend to more than 50 countries across Africa, Asia and Europe. To allow migrant workers to open an account, apply for a card, have a wallet and get their salaries paid into it, Mama Money partnered with Nigeria’s Access Bank.
“Remittances was the lead and it’s our bread and butter, but banking will be the thing that will open up the opportunity for a lot more products,” says Coquillon.
He says the company wants to offer products that make migrants’ lives better and easier. “So there’ll be funeral insurance and there might be things that come along after that.” It’s going to issue a request for proposal and insurers can bid to become Mama Money’s partner.
People are paying cash with Mama Money, says Coquillon, but if it can get them banking it can offer them insurance and other products and services and it can collect premiums.
Mama Money is licensed and regulated by the Reserve Bank and though it could allow people to transfer as much as R1m, it prefers to steer clear of risks such as money laundering. It caps remittances at R50,000 an order in a month.
With an average fee of about 3%, Mama Money edged into the remittance market, which used to be dominated by Western Union and other such companies. It sometimes transfers as much as R1bn in a month.
The company was dreamt up by Coquillon and co-founder Raphael Grojnowski after they met in Tofo, Mozambique, in 2013 and then travelled across Southern Africa together. They used their savings and started from an apartment in Cape Town with a car rented from a friend, a kitchen table, a computer, a laptop, one smartphone and Coquillon’s old Nokia.
“The joke was that I could upgrade to a better phone only when we could do a remittance using that Nokia,” says Coquillon.
Coquillon and Grojnowski found that most people in their target market said they were sending money home to their mothers, hence the name Mama Money. It started as a website, now the app can be downloaded or transfers can be made via WhatsApp. The company employs about 150 people but it doesn’t want to get too big too fast.
“The idea of overnight success is a bit of a myth,” says Coquillon. “It started slowly, we had a near-death experience during Zimbabwe’s liquidity crisis, then we had hypergrowth. In Covid we were doing well and then we overplanned and overextended ourselves for 2021 and 2022. We had to restructure and resize the team and rebuild.
“You’re going to grow and then fall down and then grow and fall down and it’ll probably happen to us again.”
But Coquillon is still clear on what the company wants to do and why. In 2013 he was on a sabbatical. He said he had struggled at school and had had a number of jobs. He was “finding my why” on a hitchhiking tour across Africa when he met Grojnowski, who was working for the UN World Food Programme.
“Our customers typically have a very hard life,” he says. “Coming to South Africa after a journey, this country is a hostile environment. There’s xenophobia, there’s crime. Then at the same time they’re working and they’re supporting two economies — locally here and they’re also sending home 60%-70% of their earnings to support their families.
“I have met a lot of heroes. It’s unfortunate that migration gets such a bad rep these days and people get stigmatised. These are mostly hardworking, genuine people, nice people who just want to live a good life and do something better for their families. For us at Mama Money we get up every day with that in our minds and say: ‘OK, I can make it better for them’.”
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