Micro-insurance in Burkina Faso

The paper explores how low-income entrepreneurs cope with the risks they face in securing a livelihood, and the role insurance plays in managing those risks. Examines the microfinance sector in Burkina Faso, including the regulatory environment and commercial insurance sector. Looks at areas where donor agencies are providing support in the field of microinsurance and surveys and analyses the practices of six MFIs in three different types of microinsurance (life, health and cattle insurance). The findings suggest that:

• Even in a poor country, microinsurance schemes can flourish;
• Simpler forms of insurance can be operated effectively, with limited actuarial skills;
• There is a huge variation in start-up and administrative costs associated with different models within the same genre of insurance;
• It is possible for an MFI to add microinsurance products with only a minor increase in administrative work.

The paper also explores prospects for the development of MFI-based microinsurance and concludes that:

• Microinsurance will expand and diversify in Burkina Faso, but for innovative products, access to best practice manual on microinsurance from other parts of the globe is necessary;
• A major constraints to the growth of microinsurance practice is the dearth of available information.