1 Adie20 years of activity business financed new job created Success ratio for companies over a 2 year period: 65% active clients Portfolio: € Portfolio at risk: 11%

2 Products and services Micro-insurance

3 Why did Adie decided to launch micro- insurance? Adie interviewed 600 new entrepreneurs, and concluded that: 1- The great majority of these microentrepreneurs, especially vulnerable to risk, do not benefit from adequate insurance coverage, posing a serious risk to their vocational activity. 2- one fourth of them initiated their activity without insurance, due to: -faulty analysis of their need by insurance companies and unfitted products -cost -lack of access to insurance (denial by insurers) Moreover, for those who started out with insurance, 60% dropped out. The micro-insurance product was specially designed in order to facilitate access to insurance for this vulnerable population, with a view to simplifying insurance contracts and pricing. An underlying objective is to educate them regarding insurance and its operation.

4 The 4 micro-insurance’s products “I have a locale” for microentrepreneurs establishing themselves at a specific site. It covers: - The site and vocational equipment - Damages caused by the existence or exercise of the activity - A financial guarantee in case of cessation or reduction of activity due to an accident or illness “I work at home” for those who work at home and/or keep their vocational equipment there. It covers: - Private and vocational equipment - Damages caused by the existence or exercise of the activity -A financial guarantee in case of cessation or reduction of activity due to an accident or illness Coverage of «vehicles and carried merchandises » : - The basic premium is the same regardless of the vehicle. - Merchandise in transport is covered up to €3, Coverage of «construction» - mandatory for building contractors. - Very difficult to cover on the regular market for someone starting a new enterprise, given the absence of a track record

5 How did we start with micro insurance? 1- Partnership with AXA and MACIF, who designed a casualty insurance scheme 2- Recruitment of a specialist in insurance 3- An experiment has been conducted since mid-2007 in four Regions. All employees have been trained to micro insurance and products. => What do we do to develop micro insurance? - offer micro-insurance and its financing: loan agents propose the insurance, postponing the premium up to ten months. This postponement is facilitated by a microcredit provided by Adie - inform clients about insurance -help in fulfilling contracts and ensuring that the insurance contracted is always appropriate -accompany the insured in his or her claim

6 What were our main difficulties? 1-Law: which does not allow us to be insurers 2- The necessary mutualization of numerous risks in order to cop with different losses 3- Adie’s staff fear to sell a new product 4- Insurers’ fear of face to face with our clients

7 The main results in 2008

8 The main lessons learnt 1- Partnership with existing insurers => a win/win partnership : They bring their expertise and we know the needs of people and how to work with them: - the microfinance institution sticks to the essence of its vocation, protects its clients and at the same time improves its credit risk - the insurer discovers a new clientele, thus opening a new market. 2- Taking the time to define the needs of its clients in order to propose a product that is simple and adapted to the institution’s clients 3- How crucial is the training our teams in both insurance and its usefulness to the entrepreneurs.

9 the impact of micro-insurance on microcredit activities? Micro-insurance contributes to the goal of covering the cost of financial services: - Strengthening the position of its clients ensures an improved credit risk for Adie; - By income generated by microcredit contracted by clients to pay the insurance premium; - Micro-insurance is a product with additional appeal making it possible to reach more clients.

10 The perspectives The insurers and Adie both have to invent a new economic model. The project’s success depends on achievement of financial balance by the two parties. A study defining the economic model, carried out at the end of 2008, showed it is possible for us to create a sustainable tool. Indeed: - Our clients offer the insurers an acceptable risk, - 1,500 new clients and 4,500 active clients would enable the insurers and Adie to cover their costs. The first indicator should be reached at end-2009, while the second should be achieved in =>Adie is going to spread micro-insurance in every agency before the end of june 2010