MICROCAPITAL BRIEF: Global Parametrics, 6 VisionFund Microfinance Institutions Prepare for Climate Disasters Under African and Asian Resilience in Disaster Insurance Scheme (ARDIS)

Global Parametrics, a for-profit risk manager funded by UK-based and German development institutions, and the UK-based NGO VisionFund International recently established the African and Asian Resilience in Disaster Insurance Scheme (ARDIS), to protect six VisionFund microfinance institutions (MFIs). In case of drought or extreme storm, the MFIs can access up to USD 10 million to manage delays in client repayments and additional funding to issue new loans to the people they serve in Kenya, Malawi, Mali, Zambia, Cambodia and Myanmar. The MFIs serve a total of 700,000 people, most of whom are women who live in rural areas. The annual cost of the coverage is 0.5 percent of each MFI’s loan portfolio. Global Parametrics and VisionFund expect to expand ARDIS to cover additional perils and MFIs in the future.

The USD 10 million in “contingent liquidity” is offered by the InsuResilience Investment Fund, which is financed by the German government and managed by Switzerland’s BlueOrchard Finance, whose net assets of USD 1.1 billion are invested in firms serving 19 million microentrepreneurs as of 2017. An unspecified amount of funding to issue new loans is offered by the Natural Disaster Fund, which is financed by the UK Department for International Development (DfID) and managed by Global Parametrics.

The following organizations provided startup assistance for ARDIS: InsuResilience, DfID, the Asian Development Bank and the US-based Rockefeller Foundation as well as the Netherlands Development Finance Company, a government-backed institution also known by its Dutch acronym FMO.

VisionFund handles microfinance activities in 32 countries for World Vision, a US-based Christian relief and development organization.

Sources and Additional Resources

Information provided to MicroCapital by VisionFund.

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