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Read the SAMIC Case Study

About the company

SAMIC Limited, a registered micro-fi nance institution began as a micro-credit program of the Cambodian Health Committee in March 1994. This was part of an effort to reduce tuberculosis incidence through a broader poverty reduction program. The company now provides micro-fi nance services through six SAMIC provincial branches in Phnom Penh, Kep, Kampot, Kandal, Siem Reap and Sihanouk Ville. SAMIC has also recently provided micro-insurance to rural families to provide protection in the event of an accidental death in the family.

Total grant funding approved: ECF A$198,450

About the project

Measure for Economic and Accelerated Development for All (MEADA) is SAMIC’s life insurance program that provides protection for immediate family members of SAMIC clients in the event of accidental death. Insurance policies are paid by small premiums included in the loan repayments. SAMIC’s program will use ECF funds to expand its reach, increase the total number of SAMIC borrowers covered by life insurance and offer an education program for clients on health matters, family planning and insurance benefits.

Results December 2012

  • MEADA has rolled out two insurance products to 17 SAMIC microfinance branch offices across the eight provinces. This includes a loan protection and a basic life product.
  • Loan officers have been hired and trained to support clients with information on insurance coverage.
  • As of December 2012, 10,215 clients were covered by loan protection and nearly 5,042 clients and their spouses were covered under basic life. To date, MEADA has settled 155 claims.
  • Uptake of insurance is relatively high. 75% of borrowers have purchased the loan protection coverage and 22% have purchased basic life coverage.

As part of examining the benefit that insurance provides to the clients, ECF funded research to explore the social and economic impact of the insurance claims -

  • Research undertaken by the Microinsurance Learning and Knowledge Centre in 2012 found the financial value of the loan cancellation averaged US$199, which represented 100% of the SAMIC loan but less than half of the total debt burden that respondents faced. The loan coverage component of the insurance helped to eliminate the cost of servicing their SAMIC loan, though it did not address some of the additional debt burden of the deceased.
  • The cash refund was on average US$129 despite funeral cost of around US$701-$983. While the cash refund had small financial value, it did add to the product’s expected value. By refunding this nominal amount, MEADA offers a tangible and psychological benefit to clients. This can improve the client’s perception of the product’s value, even if it does not substantially mitigate household costs.
  • The service value of the product is high. Interviewed beneficiaries report that the claims process was easy and efficient: on average, beneficiaries reported receiving the benefit just seven days after the death, and just one day after submitting their documents. By providing immediate relief, the MEADA product quickly reduces uncertainty after a shock.