Petra Trust worker Ghana

Case Study

Ghana's informal workers now save for the future: Petra Trust

Most workers in Ghana are ‘informal’, with many avenues to prosperity, such as long-term savings plans, shut to them. But LeapFrog-backed Petra saw that custom products could open the future to them.

Of the many financial challenges facing Africa’s emerging consumers, saving money for the future is among the highest.

In Ghana, one of the stronger West African economies, despite a national pension scheme introduced in the late 2000s, such savings ambitions remain difficult to achieve, especially for low-income earners.

This was the issue LeapFrog Investments wanted to find solutions for when it invested in independent pensions business Petra Trust, then focused on the corporate sector, at the beginning of 2014.

Reaching the emerging poor

LeapFrog’s research and development unit, Impact Labs, identified the underserved ‘informal’ self-employed, who often work in unregistered businesses and comprise 86 per cent of the employed, as a significant opportunity in the Ghanaian market.

Market research revealed that these workers, in unregulated, unprotected jobs, had very limited access to pensions products but had demand for long-term savings.

Petra’s answer to this unmet need was its Savings Booster, a long-term “flexible savings plan” that has become the flagship product of its new consumer distribution business. In 2018, Savings Booster had sales amounting to more than ¢GH30 million in assets under management.

Key to reaching the informal sector was digital technology, meaning Petra could use mobile and online services to reach the self-employed with its products and collect data to continue improving its services.

Petra hits its stride

LeapFrog’s investment in Petra enabled it to scale swiftly to become Ghana’s largest independent pensions trustee with more than ¢GH1.4 billion in assets under management by 2018. At this time the company was achieving average annual revenue growth of 76 per cent.

During this time Petra substantially improved its product quality, governance and management of risk, leaning on LeapFrog’s expertise. It also investigated new distribution strategies to better access the informal work sector. It even worked with the national regulator to formalise the pensions industry.

LeapFrog sold its stake in Petra in early 2018 to African investment firm Capital Alliance Private Equity IV.

Clare Furlonger