Property Insurance

The risk is compounded in the case of microfinance borrowers. Microfinance loans can provide valuable support for people’s livelihoods, but can quickly become burdens when clients are faced with unexpected disasters. Businesses who have taken loans are highly leveraged, and if their property is destroyed, they are likely to become bankrupt. 

MicroEnsure provides a safety net. MicroEnsure’s property cover is typically sold through microfinance organisations, and is connected to a business or loan. The insurance covers the loan amount, which is usually between $100 and $1,000, and repays the loan on behalf of the borrower in the event of the total destruction of their property due to events such as fire, flood, earthquake, extreme weather and animal impact.

This product is a first in many markets and provides vital protection for our clients. It is also a substantial differentiator for our partner MFIs, helping them attract and support clients and prepare for catastrophic events.

In November 2010, a fire ravaged a section of Accra’s Agbobloshie Market – a bustling marketplace where hundreds of women traders, like Victoria Adagwuni, sell everything from beads and shoes to fresh produce and imported soaps.

When MicroEnsure visited the market hours after the fire, it was a scene of desperation as dozens of women watched their livelihoods go up in smoke.  In the wake of the tragic fire many of the women, including Victoria, are rebuilding from the ashes with the help of MicroEnsure’s Obra Pa microinsurance product. 

Victoria Adagwuni was home with her family when she received a call she will never forget, the market was on fire and her jewellery stand was gone. Overcome with emotion, she collapsed to the ground. Like many other traders, Victoria had stocked her stall in anticipation of the busy Christmas season and the fire destroyed her entire inventory, worth thousands of dollars. Adding to her worry, she had a substantial loan to repay to her bank, Advans Ghana.

“I felt like I was going to die,” she explains as she recounts the hours after the fire. “Everything I had worked for was gone and I didn’t know how I would ever repay the rest of my loan and restart my business.” Victoria’s panic soon turned to relief as she realised her Obra Pa policy would cover the remaining $1,200 of her $1,700 loan – and provide her with a cash payout of $133, roughly a month’s earnings. “Knowing that I had insurance was like a burden had been lifted, it relieved all the tension I was feeling.” 

MicroEnsure and its partner, Advans Ghana, stepped in immediately in the wake of the fire in order to help provide relief quickly to affected clients.  Within three weeks, just before Christmas, the claims from the fire began to be paid by Vanguard Assurance, one of MicroEnsure’s underwriting partners in Ghana. At a recent ceremony, a number of women gathered at the site of the fire as Victoria and other Advans Ghana clients received their claims payments. The mood was joyous as the women accepted their cash payouts to the loud applause of friends and fellow traders.  Many women in attendance who were not clients of Advans Ghana pledged to join the bank due to the benefits of Obra Pa, which means “good life in the future”.