SEEP 2015 Arlington, Virginia October 1, 2015 Insuring Farm and Family: Innovative Risk Management Strategies in Developing Markets Pact Global Microfinance Fund

PGMF Beneficiary Welfare Fund The Institution The Product What’s Covered How it Works Challenges Possible Changes Jason S. Meikle, Deputy Director, PGMF U Aung Naing BWP Manager, PGMF

Largest and oldest MFI in Myanmar Over 650,000 clients – 98% of whom are women Over $100 Million in loans outstanding – about $165 per client 90 locations in 51 out of 320 townships – 97% in rural areas Pact Global Microfinance Fund

The Beneficiary Welfare Program Clients face conditions detrimental to their livelihoods that they can’t control, such as death and natural disaster. Micro-insurance is provided for in the 2012 law on microfinance, but has not been “activated” yet by the regulator. PGMF provides quasi-insurance through a mutual fund Clients pay 1% of each loan disbursed PGMF contributes 1% of monthly revenue PGMF makes an additional annual contribution of 15% of the fund balance Funding split is generally 60:40 clients: PGMF Claims can be for loan write-off, cash assistance, or both depending on the nature of the claim.

Coverage Client Death: $75 cash assistance plus loan write off Natural Disaster: Maximum $36 cash assistance based on lost property; loan write off only if business affected Livestock Epidemic: Loan write-off if loan used for animal purchase Loss of Fishing Nets: Loan write-off if loan used for net purchase or manufacture Childbirth: $23 for village birth $36 for hospital birth $75 for C-Section

Process Client pays 1% of loan value at disbursement Client receives cash assistance and/or loan write-off Client’s house burns down— business may also be affected PGMF staff verify the loss and propose action Management signs off

Challenges Childbirth Benefit introduced in 2013 is extremely popular, brings in new clients, but makes up 70% of the Dollar value of claims, significantly reducing the fund’s growth rate Floods have shown that institution-wide events can have a major impact on the long term viability of the self- insured model.

Possible Changes Revisit childbirth benefit Revisit premium structure New benefits? Life coverage for additional family members Increased coverage Limited health insurance—specific treatments Development of micro-insurance, regulation permitting

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