Hi Greg,
There are examples of both group and individual – in Bolivia for example, they charged all clients a small monthly fee. If they did not pay or got behind more than three months, then the benefit was lost until paying again.
The clients took it seriously. I knew a client who got in bad debt due to serious sickness and so before he died he borrowed informally from another client to pay the fees so when he died soon thereafter, his family could benefit from the insurance.
One credit union I used to work with moved beyond the savings and loan and death insurance and got into health insurance and then multiple insurance products and then as it grew in importance, the credit union then created a mutual insurance company owned by the credit union members. It became large and eventually was sold after many years.
Cheers,
Calvin
From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com]
Sent: 19 June 2015 11:50
To: MicrofinancePractice@yahoogroups.com
Subject: [MFP] Re: The microfinance delusion: who really wins?
Calvin,
Yes life savings & loan protection insurances have been an integral
element of the credit union model for decades. However, in their
classic form premiums for both are paid by the credit union as a group
cover from its general revenues, not as a specific fee or cost to
individual members. This is a critical difference, spreading the cost
over the total membership base, from the loan-loss protection being
imposed by MFIs on individual clients.
Greg
Posted by: "Miller, Calvin (AGS)" <Calvin.Miller@fao.org>
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