While microlending continues to grow in popularity, microinsurance hasn’t garnered the same popular support. Why??
The reason for this has nothing to do with the relative merits of either financial service as a tool of economic empowerment –surely,
if one is offered a loan from a bank, one should also be able to access other
Many people don’t have loans from a bank at the moment – but we do have savings and we do have insurance and these are, for most of us, more
critical to our own well-being.
What about you? The point is that you have choices, right?
So if it isn’t true that access to credit is more important than savings and insurance, what’s the reason for our general lack of interest?
It’s pretty simple: Microinsurance as a ‘cause’ is in need of serious marketing overhaul.
The “story” of microcredit has been effectively relayed to us by its proponents.yes""> Thanks to Kiva and the follow-on crop of personal microlending
sites, we can see a picture of a women’s group proudly posing next to its newly-opened
(thanks to their loan!) restaurant business in Bolivia, or read about a Malawian
entrepreneur who plans to expand her small clothing business with her microloan. We feel connected to the people
benefiting from the microfinance loans they receive and we also are told how we
can help. So we do.
Sure, the reality of microcredit is far more complicated than these glossy pictures and hopeful anecdotes might lead us to believe. But as an awareness- and capital-raising
strategy, the approach has been an unequivocal success. The industry’s challenges related to transparency,
interest rates and collateral are contended with by microinsurance professionals,
leaving the rest of us to enthusiastically support its trajectory.
Meanwhile, on the margins of the microfinance world, microinsurance is quietly championed by members of the nonprofit and development communities. Much of this advocacy is lacking the
two key features of microcredit outreach:
we don’t feel connected to it
and we don’t know how we can
Microinsurance professionals need to tell the story a little bit better if we’re going to get people to care.yes""> Let’s face it-- “insurance speak” is generally pretty
dull. Dinner party conversation
about breakthroughs in actuarial analysis and managing moral hazard doesn’t
tend to illicit a groundswell of support, does it?yes""> Just as those in the microcredit industry leave the complex
details to the professionals, so too can microinsurance professionals.
Here at Avana, one of our goals is to build a community of champions for microinsurance.
Through forthcoming stories, videos and testimonials on our site
(www.avanamicroinsurance.com), we hope to help you feel connected to this
important cause. For now, you can
help simply by learning and listening, by passing along these stories to others
who may not have thought about this issue in such a way. We also welcome your comments, your
stories or your suggestions about how we can all together build this