Microinsurance and Poverty
The workshop titled `Microinsurance and Poverty’ organized by the Institute of Microfinance (InM) was held on March 18 2009, with Dr. Salehuddin Ahmed, Governor of Bangladesh Bank, attending as the chief guest, and Professor Selim Rashid presiding over.
InM Chairman Professor Wahiduddin Mahmud attended the workshop among the audiences, which also included eminent scholars, academicians, development practitioners including from PKSF and MFIs, representatives from Bangladesh Bank and development partners like DFID, etc.
The workshop held at the meeting room of PKSF Bhaban had two presentations. Professor M A Baqui Khalily, Executive Director of InM, presented the first paper titled, `Microinsurance through Microfinance Institutions: Present State and Future Challenges.’ The second paper titled, `Health Risks in Bangladesh: How Can Microinsurance Prevent Vulnerability to Poverty’ was presented by Professor Sayed Moinul Ahsan, a visiting scholar to InM.
Professor Khalily in his paper told that rural households were subjects to various risks but had a little strength to cover those risks. The MFIs were at a unique position to deal with the issues of vulnerability and high risk of the poor households. In his turn, Professor Ahsan identified health as a critical factor in determining long-term living standards via augmenting labor productivity and microinsurance as a risk management tool that could reduce economic losses of low income poor households which might arise out of adverse health events.
Deputy Managing Director of PKSF, Mr Mosharraf Hossian Khan, called for a pro-poor definition of microinsurance as under the present law of the state the MFIs could undertake insurance activities. The lone representative of insurance company confessed the limitations of the standard insurance companies to take on micro-insurance, but the insurance companies in combination with the MFIs could meet the demand of the poor. Mr Iqbal Ahmed of Padakhep Human Development Center emphasized upon the need of research to determine premium of micro insurance. Eminent researcher Dr Mahbub Hossain, Executive Director of BRAC, stressed upon a need-based package for the poor and microinsurance, like microcredit, is not a commercial venture, insurance companies might not come forward to provide insurance services to the poor. Professor Wahiddudin Mahmud in his brief speech also told the same emphasizing upon the MFIs’ selection of aspects of life of the poor towards providing insurance services.
The Chief Guest in his remarks said that once because of failure of the banking sector the MFIs innovated microcredit, in the similar way because of failure of insurance companies the MFIs would have to provide insurance services to the poor for mitigating the recurrent risks of poor. He expressed his view that at the first stage all aspects of life of the poor might not be covered by the service. So, the MFIs could start with limited aspects at first and they could spread the services net gradually, if suited well.