New micro-insurance protects women’s livelihoods

Delfina Araujo Magno in her shop at Dili’s Taibessi markets, with Apolinario Guterres, INFUSE national programme officer and Cedric Javary, INFUSE chief technical advisor
Delfina Araujo Magno (centre) in her shop at Dili’s Taibessi markets, with Apolinario Guterres, INFUSE national programme officer (left) and Cedric Javary, INFUSE chief technical advisor. Photo: Gregorio Francisco/Tuba Rai Metin

Dili – 2013 is dawning a little more secure for 9,000 women across Timor-Leste, who are starting the year with life insurance on their small businesses. (Lee versaun Tetum iha ne'e)

Life insurance may be considered routine in other parts of the world.

But for some of the clients of Timorese microfinance organisations, Tuba Rai Metin and Moris Rasik, the concept of life insurance was completely new to them when it was introduced last year.

Highlights

  • Timor-Leste’s first regulated micro insurance products were launched by Tuba Rai Metin and Moris Rasik in April 2012.
  • Nine thousand women now have life insurance on their small businesses.
  • Payouts can be made if a client or a client’s spouse dies.

The country’s first regulated micro insurance products were launched by microfinance organisations Tuba Rai Metin and Moris Rasik, with the backing of National Insurance Timor-Leste (NITL), in April 2012.

The products were developed in partnership with the ILO Microinsurance Innovation Facility, with support from the INFUSE Programme and funding from UNDP Timor-Leste, AusAID, UNCDF and the Timor-Leste government.

Nine months on, Tuba Rai Metin team leader, Subhash Jindal said the organisations’ clients are very happy with the micro-insurance product.

When Tuba Rai Metin launched its product Credit Life Plus in Dili and Liquica in April 2012, Mr Jindal said news of the launch spread quickly. Other branch offices heard about Credit Life Plus and demanded to know when it would be available in their area as well.

The micro insurance products are one-off payments attached to new loans provided by Moris Rasik or Tuba Rai Metin.

Insurance on an US$800 1-year loan costs a Tuba Rai Metin client US$10.

Payouts can be made if a client or a client’s spouse dies. If a borrower dies, the remaining loan will be cancelled and her family will receive a pay-out on the initial borrowed amount, with a minimum of US$500. If the borrower’s husband dies, the family will receive half of the amount borrowed.

In 2012, Tuba Rai Metin made three insurance payouts – two to the family of a client who had died and one to a client, Delfina Araujo Magno, whose spouse died.

Mrs Delfina runs a small shop at the entrance of the busy Taibessi market in Dili.

In June 2012, she borrowed US$3,500.

“At that time I didn’t know what the insurance from Tuba Rai Metin covered,” she said.

Two months later, her husband, a primary school teacher, died unexpectedly from a heart attack.

“He was in good health, we didn’t see it coming. I remember that it happened precisely on the loan collection day,” she said.

She informed Tuba Rai Metin, who processed her claim and paid her US$1,750, 30 days after her husband’s death.

Tuba Rai Metin field executive officer, Gregorio Francisco explained that payouts are made 30 days after a death, so that the money is spent on the family rather than being used to pay for funeral ceremonies, which are very costly in Timor-Leste.

“Without this pay-out I wouldn’t have been able to repay the loan and my business would have struggled big time,” added Mrs Delfina.

“Insurance matters because you can never know what might happen to you and your family. And it is such a great support at a time of distress and sorrow,” she said.

According to INFUSE chief technical advisor, Cedric Javary, credit life insurance got off to a successful start in Timor-Leste because the new products included features identified by clients during a comprehensive market survey carried-out in September 2011.

In that survey, clients indicated that they wanted cover for both the borrower and spouse. They also wanted to name a beneficiary, to ensure that any payout would be made according to the client’s wishes.

“The challenge is now to ensure that all the insured are properly informed about the details of this product,” Mr Javary said.

“We are working with NITL, Tuba Rai Metin and Moris Rasik on training materials and specific documentation for field officers, the community and the borrowers,” he said.

Contact UNDP in Timor-Leste

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Jeanne Finestone, Media and Communications Officer
Phone: (+670) 7732 7211
jeanne.finestone@undp.org   

 

Sandra M. Marcal Magno
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