Fonkoze, a lender of micro-loans to small businessmen and farmers in Haiti, have now paid out over $1m in damages to its 3,800 borrowers after heavy rainfall triggered the Microinsurance Catastrophe Risk Organization (MiCRO) policies that they provide along with their loans, according to Microfinance Focus.
It was the first time that the MiCRO facility had been triggered. The facility uses parametric triggers to indicate that payments are necessary under the terms of their policies. Under the MiCRO policies customers of Fonkoze receive cover for catastrophes caused by wind, rainfall and earthquakes. The idea being that the insurance policy helps to enable a borrower to recover after disaster and makes it less likely that they default on their loans.
Most claims were paid by Fonkoze within the first 60 days after the event. Anne Hastings, CEO of Fonkoze said, “It means nothing to help our clients build their assets if they have no way to protect them against sudden loss in a natural disaster.”
MiCRO was launched by a number of major players in the risk transfer sectors including Swiss Re, Guy Carpenter subsidiary GC Micro Risk SolutionsSM (GC Micro) and Caribbean Risk Managers Limited (CaribRM). Mercy Corps, a global relief and development agency is also a founding partner as well as Fonkoze, Haiti’s leading microfinance institution.
We recently reported that MiCRO is seeking to expand its facility having now proved the viability of the facility and parametric microinsurance policies in Haiti.