PORT-AU-PRINCE: A US$1.96 million fund has been established for thousands of low-income micro entrepreneurs in Haiti without insurance by the International Finance Corporation, (IFC), a member of the World Bank Group.
The IFC is partnering with donors and the Microinsurance Catastrophe Risk Organization (MiCRO) to help protect the earning capacity of entrepreneurs from weather-related risks and natural disasters.
IFC’s project with MiCRO includes a US$1.7 million performance-based grant and $260,000 in technical assistance from the Global Index Insurance Facility (GIIF), a program managed by the IFC and jointly implemented with the World Bank. GIIF is mainly funded by the European Union, with additional funding from the Netherlands and Japan.
Haiti is highly prone to earthquakes, hurricanes, floods and other natural disasters but only 0.3 per cent of the population has some form of insurance, one of the lowest rates in the world. According to the IFC, 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.
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.”