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Case Study
Implementation of credit life in Senegal
Mathieu Dubreuil,
PlaNet Guarantee
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Microfinance Institutions & other delivery
channels
• Considerable knowledge of low-income populations
• Not able to bear insurance risks
Standard insurance and reinsurance
companies
• No knowledge and limited access to low-income populations
• Able to provide insurance activities
• Specialized Microinsurance broker & Third Party Administrator
PlaNet Guarantee acts as a link between Microfinance Institutions, insurers and reinsurers
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Credit life In Senegal
4 stakeholders : Reinsurance pool (Hannover Re, Mapfre Re & CCR), Local Insurer (Allianz Africa), MFIs (6 in Senegal) & PlaNet Guarantee
The product : basic credit life scheme Death (illness, accident) & total & permanent disability (accident) Coverage from 100% to 200% of the initial capital Max amount without medical questionnaire : 22 000 € (48 months). Compulsory membership for borrowers In case of claim : repayment to the MFI
Keeps the outstanding capital Transfers to the family the amount already repaid
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Credit life In Senegal : Implementation Subscription of the policy between Allianz & the MFI Management proxy signature between PlaNet Guarantee & the MFI Fees : 27%, including
MFI : 7% of total premium collected + 80% profit sharing on net income Training process :
1 training session to the management & some branch managers. Then the MFI shall spread the information & the documents.
Support material : information form, subscription guide, training support, leaflets, posters
Management process : Each month, the MFI sends the list of disbursed credits with basic information & list
of claims PG control and sends the call for premium and checks the amount transferred on the
insurer’s account In case of claim :
few documents to send (scan of : ID, loan contract, death certificate, claim settlement form)
1st level of control by PlaNet Guarantee and payment by the insurer.
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Credit life In Senegal
Some figures 17 MFIs signed the credit life policy in 9 countries / 7 in Senegal 189 000 people insured since 2007 / 76 809 in Senegal 371 000 € of premiums / 97 630 € in Senegal Claims : most contracts have no claims.
Egypt : 1 contract with C/P > 100% in 2009. 36% 2010 Madagascar : 1 contract with C/P = 31% Senegal : 1 contract with C/P = 9% in 2009 / 2% in 2010
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Credit life In Senegal : Lessons learnt Training
We noticed a very low level of information in the staff of MFIs A much lower level of awareness in the insured population (also on the
price) Absence of support materials in branches Sent someone to inform, train and provide the documents
Membership process ID issue Difficulty to have the information on every members of groups Files transfer : technological & costs issues The president of the group attests the age of the member Test of a new MIS & changes in the MFIs’ loan contract / MIS Complete change of management process
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Credit life In Senegal : Lessons learnt Claim settlement process
The MFIs find it difficult to gather all necessary documents. Long claim settlement process
We notice real mistakes in the information sent by the MFI in the membership file.
Waiting period : example in Madagascar
Weaknesses of the product MFIs are not necessarily the best distribution channel for microinsurance Credit life is a basic microinsurance scheme. How can we cover new types of
risks without being a heavy burden for clients? Interest for MFIs to distribute a product they can manage themselves? Technical capacities to distribute basic schemes What happens if the MFI decides to stop paying the premium? What if it has no
financial capacity to disburse credit? What if the MFI decides to work with several insurers at the same time on the
same product?
