Ghanaians and Malawians without a formal relationship with financial services will be able to access Accident, Sickness and Health insurance products for the first time thanks to the Swiss Capacity Building Facility (SCBF), in partnership with microfinance network VisionFund International and its parent, development NGO World Vision.
World Vision and VisionFund International have been awarded grant funding from SCBF to pilot the provision of insurance services to underserved populations in Ghana and Malawi. The project will provide informal savings groups with insurance services that cover accidents, healthcare needs and lost income due to hospitalisation for group members and their dependents. Savings Groups are informal community groups which are owned, managed and operated by the members, using a simple, transparent method where groups accumulate and convert small amounts of cash into savings. The group’s savings are then lent as credit to the group’s entrepreneurs to earn additional income, or to help cover emergency needs.
Members of World Vision’s five Area Programme’s Savings Groups in Ghana and in Malawi do not typically have easy access to health services due to prohibitive costs, and can suffer substantial lost income when accident or illness strikes their families. This can also have a negative impact on their ability to repay their loans. Though some national health insurance schemes are available, the new project will provide a cash benefit to claimants, allowing for more flexible recovery of health and accident-related shocks.
“Through funding provided by SCBF, we will be able to implement a microinsurance product adapted to the needs and the capacity to pay of members and that will ensure that the families aren’t placed under financial stress if members fall ill, or are unable to pay into the savings pot,” said VisionFund International’s Director of Insurance, Solène Favre.
The project aims to test a range of different innovations, including different channels of promotion and integrating a health education module that will help families understand both their new insurance package, and health protection techniques. The insurance schemes in both countries will be fully digital, and supported by SCBF-funded consultants, which will be cost effective for the multi-country approach. Most critically, the insurance products will be tailored to members’ needs, ensuring that they provide the most appropriate insurance cover for Savings Groups in different country contexts.
When the project is fully rolled out, more than 87,000 Ghanaians and 272,625 Malawians will have access to insurance. According to the CGAP, only 58 percent of Ghana’s adult population had access to formal financial services in 2015. A recent Finmark Trust study shows that, over 50% of the Malawian population is financially excluded.
VisionFund expects to learn and share lessons from this pilot project that can be applied elsewhere in World Vision and Vision Fund’s global footprint, as well as publishing lessons learnt for the wider industry to consider.
ABOUT VISIONFUND INTERNATIONAL
VisionFund International, World Vision’s microfinance subsidiary, has been improving the lives of children in the developing world for over 17 years. By offering small loans and other financial services, clients develop successful businesses, enabling their children to grow up healthy and educated. In FY2020, VisionFund International’s network of microfinance institutions provided loans to one million clients, with nearly three-quarters of these going to women and over a third to clients actively involved in farming. Repayment rates were 91%. Also, in FY2020, 3.6 million children were positively impacted through its MFI network located across 28 countries in Africa, Asia, Eastern Europe and Latin America.
SCBF is a public-private development partnership (PPDP) and its intervention strategy is to give grants to technical assistance (TA) providers to work with partner financial institutions (PFIs) to develop and upscale client-centred financial product channels and services.
The financial products and services include savings, loans, insurance, digital financial services, or financial education, among others. Thereby increasing access and usage to SCBF’s end-clients; low-income people, smallholder farmers and small-scale entrepreneurs to improve their livelihoods.