MICROCAPITAL BRIEF: Advans Pakistan Microfinance Bank, MicroEnsure, EFU Life to Cover Loan Payments in Case of Sickness, Disability, Death, Death of Spouse

Advans Pakistan Microfinance Bank, a member of the Advans SA group that offers financial services to micro-, small and medium-sized enterprises (MSMEs) in Pakistan, has joined with MicroEnsure Pakistan, a subsidiary of the UK-based MicroEnsure insurance agency, and Eastern Federal Union Life, a private-sector life insurance company in Pakistan, to introduce “Enhanced Credit Cover” for its borrowers. This insurance includes “Credit Health,” which covers loan payments for borrowers in the event of the borrower’s hospitalization during the repayment period. In addition, the plan covers payments in the case of the borrower’s death, disability or spouse’s death. It is unclear whether this is a voluntary coverage option or if it has been incorporated into all loans disbursed by Advans Pakistan [1].

Speaking about the coverage design, Advans Pakistan CEO Tanguy Gravot reportedly stated, “We are happy on signing up this innovative credit protection for our borrowers. We aim to protect our clients from the various risks they face in their everyday lives and also intend to provide similar innovative protection to our depositors helping them achieve their financial goals” [2].

Advans Pakistan is 70-percent held by Advans SA and 30-percent held by the Dutch public-private partnership Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), and as of 2014 it has total share capital of PKR 800 million (USD 8.1 million). As of 2012, Advans SA reported total assets of EUR 33.5 million (USD 44.5 million), committed capital of EUR 43.6 million (USD 58 million) and 360,000 clients served in seven countries. MicroEnsure, which converted to for-profit from its previous non profit status in 2013, provides insurance to approximately 4 million individuals in Africa, Asia, and the Caribbean [3]. As of the end of 2013, EFU Life had an asset base of PKR 49.1 billion (USD 497 million) and a gross premium income of PKR 14.1 billion (USD 143 million) [4].

By Benjamin Krupp, Research Associate

About Advans SA

Launched in 2005, Advans SA SICAR is a venture capital company that is registered in Luxembourg and managed by Horus Development Finance of France. The mission of Advans is to increase access to financial services for micro-, small and medium-sized enterprises (MSMEs) in emerging economies. In addition to equity and debt funding for microfinance institutions (MFIs), Advans provides technical assistance to MSMEs in an effort to assist them in achieving sustainable and profitable operations. As of 2013, the Advans network serves approximately 322,000 loan clients via 140 branches in eight countries: Cambodia, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Ghana, Pakistan, Tanzania, and Nigeria. As of March 2013, Advans SA held total assets of EUR 45.0 million (USD 61.7 million) and committed capital of EUR 43.6 million (USD 58 million).

About Advans Pakistan

Advans Pakistan MFB is a microfinance institution (MFI) in the Republic of Pakistan and a member of the Advans SA group of financial institutions. Advans Pakistan MFB was incorporated in April 2012 and opened its first branch in January 2013. The bank offers credit and savings services to micro-, small and medium-sized enterprises (MSMEs). Advans Pakistan MFB is 70 percent held by its founder shareholder ADvans SA and 30 percent by the Netherlands Development Finance Company (FMO), a private-sector development bank based in the Netherlands. Financial information on Advans Pakistan is not available.

About MicroEnsure

Formerly known as Micro Insurance Agency, MicroEnsure was founded in 2005 in the UK as a subsidiary of US-based nonprofit microfinance network Opportunity International. In 2013, the organization converted to for-profit status, at which time time it was owned by members of its management as well as US-based NGO Omidyar Network and the World Bank Group’s International Finance Corporation (IFC). As of 2014, MicroEnsure provides products including health, life, property and weather-index insurance to approximately 4 million clients in Africa, Asia and the Caribbean. About half of those insured by MicroEnsure are in located in Africa and served by main subsidiaries in Kenya, Ghana, Tanzania, and satellite operations in Malawi, Mozambique, Rwanda, Zambia and Zimbabwe.

About Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.

Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) is a Dutch development bank that was founded in 1970. It supports financial institutions and governments through loans, guarantees and other investment promotion activities including local-currency investments. FMO is owned by the Dutch government, which holds a 51-percent stake, alongside commercial banks, trade unions, employers’ associations and individual investors. In 2013, FMO reported total assets of EUR 6.2 billion (USD 8.5 billion).

Sources and Additional Resources

[1] The News, “Most innovative Enhanced Credit Cover and Credit Health being launched in Pakistan,“ May 2014, http://www.thenews.com.pk/Todays-News-3-248287-Most-innovative-Enhanced-Credit-Cover-and-Credit-Health-being-launched-in-Pakistan

[2] Business Recorder, “’Credit Health’ Being Launched in Pakistan,” May 2014, http://www.brecorder.com/money-a-banking/198/1179059/

[3] Opportunity International, “Opportunity International Courts New Strategic Investors for MicroEnsure,” http://opportunity.org/news/news-room/press-releases/opportunity-international-courts-new-strategic-investors-for-microensure

[4] EFU Life Assurance, “Annual Performance Review,” http://vimeo.com/90296013

Advans Pakistan, “Overview,” http://www.advanspakistan.com/index.php?id=909

MicroEnsure, “About MicroEnsure,” http://www.microensure.com/resources-aboutus.asp

EFU Life, “About Us,” http://www.efulife.com/about-us/

MicroCapital Universe Profile, Advans SA, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Advans+SA

MicroCapital Universe Profile: Advans Pakistan, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Advans+Pakistan

MicroCapital Universe Profile: MicroEnsure, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MicroEnsure

MicroCapital Universe Profile: Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V., https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29

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