Rural Banks receive micro-insurance lessons


Executives of 54 rural banks, six savings and loans companies and other microfinance institutions have been taken through the benefits of micro-insurance and effective credit- management at a three-day workshop at Ejisu in the Ashanti Region.

The workshop — organised by Star Micro-insurance Services in collaboration the Association of Rural Banks (ARB-Ghana) and supported by StarLife Assurance, Airtel Money and the Ghana InterBank Payment System (GhIPSS) — attracted participants from the Ashanti, Brong Ahafo and three northern regions.

Chief Operating Officer, Star Micro-insurance Services, Solomon Larbey, said the main aim of the workshop was to educate rural banks on the benefits of micro-insurance to their clients and themselves.

“Most people take loans and the tendency to default is very high. So we are advising these institutions to take the credit life policy to protect them against such situations.

“We also want them to educate their clients — rural folk and farmers — to take the policy to protect them against bad times like weather failure, which leads to low productivity,” he said.

A micro-insurance expect, Roland Steimann, said rural banks are strategically positioned and therefore have a role to play in bringing on board more of the low-income earning population to benefit from micro-insurance.

“Rural banks have an important role to play in bringing the informal sector and low-income earning households into micro-insurance. This is because they are already located in these areas and do business with them.”

Mr. Steimann urged the banks to introduce new services that will attract more clients because there is still a lot of people who are yet to start banking.

He said though micro-insurance is very beneficial, Ghanaians have little trust in the insurance sector generally.

“More education is needed, and awareness-creation should be intensified not only from the insurance companies but all other key stakeholders including the insurance regulatory body, the government and the insurance associations.”

A Deputy Director of ARB-Ghana, Kwabena Adjei Acheampong, said with the growing challenges facing rural banks, it will be in their best interest to access such a policy to protect them against loan default by clients.

With about 230,000 clients and several partners, Star Micro-insurance Services Limited was incorporated as an independent agency in July 2008 to collaborate with Star Assurance Company and StarLife Assurance Company Limited.

It is dedicated to serving low-income households with an affordable and suitable range of micro-insurance products, and is responsible for the design of micro-insurance products that suit the needs of its target market.

Currently, it is present in 26 markets in the country and works with institutions such as Opportunity International, Kakum Rural Bank and Women’s World Bank.

By Bernard Yaw ASHIADEY

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