Microfinance Innovation Center For Resources and Alternatives

Catastrophic life events in the form of illness, accident, job loss, failed harvest or death may have increased impact for the poor, as they often don’t have enough savings to absorb the shock. Each peril turns into a financial disaster that leads them deeper into poverty. Greater risk management systems are needed to support low-income people, to help them avoid increased financial strain. Insurance is one of possible solutions.

There are four models available for implementing microinsurance through MFIs.

After conducting research and interviews, the PAC team extracted some useful tips for MFIs. Those intending to penetrate the microinsurance market should anticipate several challenges and difficulties:

Kartika (21) is a low-income housemaid residing in Jakarta. She’s been a customer of Bank Mandiri for two years. The Javanese born woman could immediately use her ATM card without significant difficulties as soon as she opened her account.