Will Mobile Money Bring Microinsurance to the Poor?
By: Camilo Tellez, Mobile Money for the Unbanked – Matu Onyango is a farmer in the region of Nanyuki, 250 km north of Nairobi. His family’s welfare depends solely on the income derived from maize crops. During the last drought that afflicted the region, not only did his crop suffer, but one of his four children fell seriously ill. Thus, Matu’s income fell just as his daughter’s illness caused his expenses to spike; the combination forced him to exhaust his family’s savings, throwing the whole household deeper into poverty. In the last decade, microinsurance, or insurance designed to serve low-income clients, has become an effective tool in poverty alleviation by giving poor people access to adequate risk-management tools. It does so by reducing their vulnerability to falling back into poverty in times of economic hardship and by allowing them to take advantage of profitable opportunities they otherwise would not be able to. However, according to the International Labour Organization, o
