An ESG-aligned education insurance model funded by Safaricom’s Bonga Points

Abstract

This study explores an ESG-aligned education insurance model utilizing Safaricom’s Bonga Points to address indirect education costs in Kenya, such as transportation, uniforms, and school supplies. By leveraging digital loyalty points, the proposed model integrates principles of environmental sustainability, social equity, and ethical governance to enhance financial inclusion. The research employs the Vasicek model to project inflation-adjusted education costs and evaluates the model's feasibility across varying conversion rates of Bonga Points. Microsoft Excel was instrumental in modelling the Vasicek framework by enabling the calculation of key parameters such as mean reversion speed, long-term mean, and volatility through regression techniques. It also facilitated forecasting inflation rates using stochastic simulations and graphical comparisons to assess the feasibility of accumulated Bonga Points against education costs. Results demonstrate that a conversion rate of 1:1.467 achieves a 90% feasibility threshold, balancing customer value with business sustainability. This innovative approach not only mitigates financial barriers to education but also aligns with ESG goals, fostering long-term social and economic benefits. The findings emphasize the potential of loyalty programs as funding mechanisms for education while highlighting the need for further research and stakeholder collaboration to ensure scalability and impact.