Stepping into the breach for the risks of the individual
For poor people in developing countries the financial consequences of sickness, disability or death are disastrous. They do not have their own capital or reserves. And they cannot fall back on the luxury of social services either. The alternative, private insurance, is way out of reach for these people. They are not even familiar with the concept of insurance. Even if insurance exists at all in such countries, the poorest inhabitants cannot afford it.
That means that victims of a financial disaster have to rely on help from their own environment. But their relatives and fellow-villagers usually suffer the same poverty, so that is no real solution. The only thing that helps is if the community, village, town or region decides to set up its own ‘kitty’. If enough people contribute, it is possible, for a relatively small amount per person, to build up a reserve that is big enough to pay benefits to individual victims. That is the essence of micro-insurance, the field of operations of MIAN.
Micro-insurance can be compared to the mutual insurance policies we used to have in the Netherlands around 1900. In those days many collaborative ventures sprang up, particularly among the poor farmers. These ‘co-operatives’ engaged in communal buying and selling, as well as financial transactions such as savings, loans and insurance. The roots of large financial institutions like the Rabobank, Interpolis and Achmea can be traced back to these agricultural co-operatives. And that old, tried and tested formula of mutual insurance still works very well in the 21st century in developing countries. With MIAN in the role of motivator, supporter and counsellor.
