Microinsurance Catastrophe Risk Organisation (MiCRO), a reinsurance company based in Barbados that provides tropical storm and earthquake reinsurance to microinsurance schemes, is due to make a payout of an undetermined amount to Fonkoze, a Haitian microfinance institution, to help its borrowers, who are largely female microentrepreneurs, recover from Hurricane Sandy, which struck the country in November. Fonkoze is to pay the local-currency equivalent of USD 125 to microentrepreneurs who lost their homes, business premises or goods during the hurricane. Fonkoze reckons that as many as 12,000 of their customers may qualify for a payout under the terms of their parametric, weather-index based insurance policies. Anne Hastings, CEO of Fonkoze reportedly noted that “MiCRO’s reinsurance product which offers a quick and reliable payout makes it possible for Fonkoze to help Haitian small business owners rebuild. There is no way we would have the resources to cover such huge losses without MiCRO”.
Through MiCRO, Fonkoze provides its members with a catastrophe recovery product known as Kore W, which microentrepreneurs in Haiti must purchase through a partially subsidized premium at the start of each loan cycle. The Kore W product provides payouts, allows cancellation of outstanding loan balances, and offers new loans when members are ready. The people covered by Kore W are mainly women, many of whom earn less than USD 2 a day selling goods at local markets. The parametric nature of the insurance means that the payouts Fonkoze makes are linked to actual weather conditions instead of requiring claims assessment process, which can be costly and slow.
MiCRO was formed in March 2011 by Haitian microfinance provider, Fonkoze and Mercy Corps, a US-based nonprofit organization, with support from the UK’s Department for International Development (DFID) and Swiss Re, a reinsurer and financial services group based in Zurich, Switzerland. In 2011, MiCRO provided Fonkoze with USD 1.64 million in payouts provided to nearly 6,800 Haitian women.
As of 2010, Fonkoze reported total assets of HTG 1.35 billion (USD 33.9 million), a gross loan portfolio of HTG 462 million (USD 11.6 million), approximately 50,500 borrowers and 234,000 depositors.
By Chioma Okwudiafor, Research Associate
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About Microinsurance Catastrophe Risk Organisation (MiCRO)
MiCRO was formed in March 2011 by Haitian microfinance provider, Fonkoze and Mercy Corps, a US-based nonprofit organization, with support from the UK’s Department for International Development (DFID) and Swiss Re, a reinsurer and financial services group based in Zurich, Switzerland. MiCRO offers a hybrid insurance product with a payout partially based on a set of weather-related triggers (wind speed, rainfall and earthquakes), and part based on the extent of actual losses. All Fonkoze microentrepreneurs pay for insurance coverage through a partially subsidized premium at the beginning of the loan cycle. In 2011, MiCRO provided Fonkoze with USD 1.64 million in payouts provided to nearly 6,800 Haitian women.
Fonkoze was established in Haiti in 1994 with the mission of “building the economic foundations for democracy in Haiti by providing the rural poor with the tools they need to lift themselves out of poverty.” Fonkoze is comprised of three institutions: Fonkoze, Fonkoze Financial Services (FFS) and Fonkoze USA. Fonkoze is a nonprofit microfinance institution that opens and builds new branches. FFS is a commercial MFI that expands the branches established by Fonkoze. Fonkoze USA channels financial and technical support to its Haitian partners. As of 2011, Fonkoze had 46 branches and reported total assets of HTG 1.35 billion (USD 33.9 million), a gross loan portfolio of HTG 462 million (USD 11.6 million), approximately 50,500 borrowers and 234,000 depositors.
Sources and Additional Resources:
FONKOZE Press Release: MiCRO and Fonkoze to provide swift insurance payout after Hurricane Sandy http://fonkoze.org/innews/pressrelease/348-micro-and-fonkoze-to-provide-swift-insurance-payout-after-hurricane-sandy-.html
MicroCapital Story: September 26, 2012, MICROCAPITAL BRIEF: MiCRO, Fonkoze of Haiti to Make Insurance Payout to Women Microentrepreneurs in Wake of Tropical Storm Isaac
MicroCapital Story, June 21, 2012: “MICROCAPITAL BRIEF: Microfinance Institution (MFI) Fonkoze Initiates Claims Process for Clients Affected by Heavy Rains in Haiti”
MicroCapital Universe Profile: Fonkoze
MicroCapital Universe Profile: MiCRO
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