Case Study
TYM's Mutual Assistance Fund, Vietnam
What are the lessons from the experience of TYM's Mutual Assistance Fund?
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This paper discusses the Mutual Assistance Fund (MAF) launched by the TYM (Tao Yeu May) fund in 1996 to protect against the death of a client or client's family member. The TYM fund is a Grameen replication project managed by the Vietnam Women's Union (VWU), a mass-based national organization to promote the welfare of Vietnamese women.
The paper presents important characteristics of the MAF:
- Premium charged on flat rate rather than a rate based on the size of the loan or the number of family members covered;
- Weekly contributions of VND 200 (USD 1 cent);
- Outstanding loan balance written off upon client's death, also family receives VND 400,000 (US $26) to cover funeral expenses.
Some of the strengths of MAF, according to the paper, are:
- Appropriate product design for low-income rural households;
- Easy start-up and management;
- Streamlined claims procedures.
The paper also presents lessons from MAF's experience in microinsurance. These are:
- Focus must be on long-term sustainability maintaining affordable pricing as well as products responsive to clients' needs;
- Adequate staff training and client sensitization is necessary;
- Periodic adjustment of premiums and benefits according to changing risk profiles of clients is essential.
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