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Michael Owino used to run a phone shop in Kisumu City. However, it was vandalized during the post-election violence and he lost stock worth about Sh300,000. He lost his livelihood. Mr James Kamau, a pharmacist in Busia, lost his entire stock worth Sh800,000. He and his family of five sought refuge in Uganda. Estimates put the losses within the small and medium enterprises sector at about Sh4 billion.This would have been doom and gloom for the business owners, where a majority of Kenya entrepreneurs fall, if a new concept of insurance, known as micro insurance, had not landed in Kenya.
Micro insurance is essentially insuring low income households by enabling them to pool together small amounts of money, which is then used as a premium to cover their specific risks.Unlike the conventional insurance, micro insurance requires clients to pay low premiums and is generally targeted at people working in the informal sector.In countries like India and South Africa, micro insurance has been used to empower the poor, ensuring that as many people as possible access related financial and medical services in addition to having ‘shock absorbers’ for such risks.Statistics indicate that of the four billion people worldwide who live on less than two dollars a day, less than 10 million have access to any form of insurance.
In Kenya, the concept was initiated by the Co-operative Insurance Company (CIC) and the United Nations Development Programme. ...................................................
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