IFC Awards $1.96 Million to Insure Haitian Entrepreneurs against Natural Disasters
In Washington, DC:
In Port-au-Prince, Haïti:
In Port-au-Prince, Haïti
Port-au-Prince, January 29, 2013 - IFC, a member of the World Bank Group, is partnering with donors and the Microinsurance Catastrophe Risk Organisation (MiCRO) to help thousands of low-income micro entrepreneurs protect their livelihoods against weather-related risks and natural disasters.
Haiti is highly prone to earthquakes, hurricanes, floods and other natural disasters that have devastating effects on the country's population and economy. However, only 0.3 percent of the population has some form of insurance, one of the lowest rates in the world. Micro-entrepreneurs are particularly vulnerable to uninsured losses, as these can force them to default on debts and disqualify them from future loans at a time when they need capital to recover.
IFC’s $1.96 million project with MiCRO includes a $1.7 million performance-based grant and $260,000 in technical assistance from the Global Index Insurance Facility (GIIF). GIIF is an innovative program managed by IFC and jointly implemented with the World Bank. GIIF is funded mainly by the European Union with additional funding from the Netherlands, and Japan.
The project will help provide Haitian micro entrepreneurs with affordable weather-index insurance. It will be distributed through Fonkoze, a leading microfinance institution in Haiti. Over the next three years, close to 70,000 Fonkoze clients, mostly rural women, are expected to be insured through the program. They include shopkeepers, traders and market vendors who provide their communities with the essential goods and services.
“In Haiti, entrepreneurs at the base of the pyramid, and women in particular, must be given the opportunity to generate income for their households, grow their businesses, create jobs, and build assets,” said Ary Naim, IFC Representative in Haiti. “With this innovative product, IFC hopes to have a strong impact, preventing natural disasters from wiping out the hard work of thousands of Haitian entrepreneurs to get out of poverty.”
MiCRO was founded by Fonkoze and Mercy Corps, a global humanitarian agency.“MiCRO and Mercy Corps are committed to developing innovative solutions that help the world’s poor be more resilient to the threat of natural catastrophe and the effects of climate change,” said Steve Mitchell, Acting Chairman of MiCRO's Board and Vice President of Financial Services for Mercy Corps. “MiCRO is the result of a partnership of leading global organizations committed to this vision.”
“There is tremendous potential in Haiti. By working with IFC and our local partners we can provide much- needed insurance that helps Haitians unleash economic growth,” said Javier Niño Perez, Head of the EU delegation in Haiti. “GIIF has supported projects in Africa such as Kenya, Rwanda, and Senegal; in Asia, such as Sri Lanka and Bangladesh; and an additional 20 countries jointly with the World Bank. This project in Haiti is an important step toward developing sustainable local markets for insurance that helps the poor protect themselves from natural disasters and weather-related risks.”
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
The Microinsurance Catastrophe Risk Organisation (MiCRO) is a specialty reinsurance company that designs and delivers insurance solutions for low-income microentrepreneurs, primarily through microfinance institutions. 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). MiCRO’s strategic partners include Swiss Re, a leading and highly diversified global reinsurer; Caribbean Risk Managers Limited, the risk analytics arm of CGM Gallagher Group, the Caribbean’s largest risk intermediary; and GC Micro Risk Solutions, a division of Guy Carpenter & Company, LLC, a global leader in providing risk and reinsurance intermediary services. www.microrisk.org
Fonkoze (Fondasyon Kole Zèpol, or “Shoulder to Shoulder Foundation”) is a Haitian microfinance and development institution, offering a range of financial and social services designed to promote economic progress and democracy in Haiti. Founded in 1994 by Fr. Joseph Philippe, Fonkoze began with a staff of only three volunteers and has since become Haiti’s largest microfinance institution. Fonkoze Financial Services has 46 branches that cover every region of Haiti, serving some 64,000 borrowers and 290,000 savers. Fonkoze’s Foundation offers education and health programs that enable microfinance clients to receive the training and health services they need to use their loans successfully. Through microinsurance initiatives and other social services, Fonkoze continues to innovate on behalf of Haiti’s poor. www.fonkoze.org.
About the European Union
The European Union is made up of 27 Member States who have decided to gradually link together their know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and individual freedoms. The European Union is committed to sharing its achievements and its values with countries and peoples beyond its borders. www.ec.europa.eu/europeaid/