Microinsurance Protection for Timor Leste Women

Microfinance Focus, April 26, 2012: The provision of regulated microinsurance to the vulnerable people who live below the poverty line in Timor Leste will be made available soon. National Insurance Timor-Leste (NITL) has partnered with Tuba Rei Metin and Moris Rasik, the two microfinance institutions currently operating in Timor-Leste, to introduce the first ever regulated microinsurance products in the country.  With this partnership NITL promises to provide protection to nearly six per cent of the economically active population by the end of 2012.

There are more that 17,000 female clients across the 13 districts of Timor Leste. Tuba Rai Metin and Moris Rasik will distribute these microinsurance products to its clients while NITL underwrites the products. ‘Credit Life Plus’ and ‘Asuransi Protesaun ba Familia’, the two first products developed are mandatory as they are tied to the disbursement of new loans and provide coverage for the women and their spouses.

Pay-outs are linked to the size of the loan and product benefits have been tailored to meet the peculiar needs of the borrower in each organization. At a minimum, however, if a borrower dies, her outstanding loan balance will be cancelled and her family will receive $500. In the case of the borrower’s spouse dying, his family will receive, at a minimum, $250.

‘Credit Life Plus’ was launched by Tuba Rai Metin on 2nd April at their Dili branch. Moris Rasik will launch ‘Asuransi Protesaun ba Familia’ on 2nd May at their Ermera branch. These products are expected to cover more than 34,000 lives by the end of 2012.

“NITL is committed to develop the insurance and risk management industry in Timor-Leste that will in turn contribute to the positive long impact on Timor-Leste’s economic future, and we hope that this partnership with Tuba Rei Metin and Moris Rasik will enhance the quality of life for the widows, orphans and the needy. The provision of low cost insurance to thousands of Timor-Leste’s poor families constitutes a vast market potential. Microcredit is a rapidly expanding business in Timor-Leste and by offering insurance we are expanding the range of financial services available to families which previously had been excluded. The provision of microinsurance is thus in line with NITL’s social mission,” NITL Managing Director, Mr. Collin Yap, expressed.

Upon signing up for the product, Tuba Rei Metin clients felt that the price was fair and not too high. A client conveyed, "We like this product and think it can help us in the future.  After all, I don't know my destiny, only God knows."

The Inclusive Finance for the Under-served Economy (INFUSE) Programme facilitated the partnerships between the microfinance institutions and NITL through the provision of technical support and advice. The INFUSE Programme is funded by UN Capital Development Fund (UNCDF), United Nations Development Programme (UNDP) Timor-Leste, the Ministry of Economy and Development (MoED) and the Australian Agency for International Development (AusAID).

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