The Role of Microinsurances in Microfinance

Alicia Bové Ramirez & Maria José Holmegaard Sánchez

Student thesis: Master thesis


Experts on development have found strong potential in microfinancial products such as microcredits and microinsurances, which now have been adapted to the base of the pyramid market. In order to be sustainable, these products are created with the intention to be innovative and at a low cost. At the same time they should function as a tool to favor disadvantaged groups such as women. In this thesis, we present how organizations such as CODESPA and ADOPEM search for partners to unify their capabilities in order to achieve a greater impact on disadvantaged groups. At the same time, we also discuss how private companies want to make partnerships with such organizations part of their CSR program. This with the purpose of unifying resources and benefit each other. Moreover, we study how these organizations are carefully working on developing microfinancial products that may help create development for disadvantaged groups. CODESPA’s and ADOPEM’s years of experience allow them to know how to approach disadvantaged groups in a successful manner. In order to describe and analyze how these organizations are working on socioeconomic development, we present a case study from the Dominican Republic. The case shows how these organizations have been putting their efforts in searching for solutions to catalyze development and, at the same time, improve the effectiveness of the services they offer. In particular, the case we analyze focuses on how to design and implement a microinsurance product that may help poor Dominican entrepreneurs to make better use of the loans they have been granted. Our contribution is the development of a new theoretical framework that assesses how microinsurance could help alleviate the critics of microfinance and in particular, of microcredits. Furthermore, we also assess how the product described in our case – life microinsurance – could be improved in order to respond to the weaknesses pointed out by the critics. By doing this, we arrive to one of our main findings, which suggest that MIF should focus on designing more social focused products such as health insurance to deliver a greater value to small Dominican entrepreneurs and borrowers.

EducationsMSc in Business, Language and Culture, (Graduate Programme) Final Thesis
Publication date2012
Number of pages120