Insurance payout will accelerate recovery of thousands of Haitian small businesses
The reinsurance company Microinsurance Catastrophe Risk Organisation (MiCRO) will make a significant payout to the Haitian microfinance institution Fonkoze following Hurricane Sandy. Fonkoze will use these funds to pay a fixed sum of Haitian Gourdes 5,000 (USD 125) and to cancel the outstanding loan balances of thousands of female microentrepreneurs who lost their homes or inventories. MiCRO expects the payout to be made to Fonkoze in the next few weeks.
“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,” said Anne Hastings, CEO of Fonkoze. “In the absence of insurance, the women we work with would be left destitute and without hope.”
Through MiCRO, Fonkoze provides its members with the catastrophe recovery product Kore W, which microentrepreneurs purchase through a partially subsidized premium at the onset of each loan cycle. Kore W provides payouts, allows cancellation of outstanding loan balances, and offers new loans when members are ready. The Kore W purchasers are women, many of whom earn less than USD 2 per day selling small goods at local markets, and their homes or inventories have been destroyed or heavily damaged by the storm.
The payout will allow Fonkoze to address the needs of more than 12,000 of its members who lost either their homes or their business merchandise due to the rain. “This has been a devastating disaster with tremendous damages. We anticipate MiCRO will make its largest payout to date – supporting Kore W funds for thousands of women,” said Steve Mitchell, Acting Chairman of the Board of MiCRO and Vice President of Financial Services at Mercy Corps.
Hurricane Sandy made landfall in Haiti in late October, dumping 20 inches of rain on the country’s south, and flooding out many areas that were still recovering from last summer’s Tropical Storm Isaac. Fifty-four Haitians have been confirmed dead, 18,000 people have been displaced, and losses of homes and business are thought to be significant. Haitian President Michel Martelly has declared a month-long state of emergency.
The Microinsurance Catastrophe Risk Organisation (MiCRO) is a specialty reinsurance company that designs and delivers solutions that enable low-income people to protect themselves against losses after catastrophes. MiCRO was founded in 2011 by Fonkoze, Haiti’s leading microfinance institution, and Mercy Corps, a global humanitarian agency, with support from the UK Government’s Department for International Development (DFID) and the Swiss Agency for Development and Cooperation (SDC). MiCRO’s strategic partners include Swiss Re, a leading and highly diversified global reinsurer; Caribbean Risk Managers Limited (CaribRM), the risk analytics arm of CGM Gallagher Group, the Caribbean’s largest risk intermediary; GC Micro Risk Solutions (GC Micro), a division of the world’s leading risk and reinsurance specialist Guy Carpenter & Company, LLC and Alternative Insurance Company in Haiti. www.microrisk.org
Fonkoze is Haiti’s largest microfinance institution (MFI), with 46 branches serving 60,000 borrowers and 290,000 savers in every region of Haiti. Fonkoze is one of the best known MFIs worldwide for its innovative approaches to reaching the poorest and helping them take the first steps out of poverty. Fonkoze’s website address is www.fonkoze.org.