BSP supports expansion of access to appropriate risk protection for the poor through Microinsurance

Bangko Sentral ng Pilipinas – In line with the Bangko Sentral’s objective of increasing access to much-needed financial services, the Monetary Board approved yesterday the marketing, sale and servicing of microinsurance products by rural, cooperative and thrift banks.

This approval presents an enormous potential of allowing the network of nearly 3,500 rural, cooperative and thrift banking offices, subject to certain prudential rules and regulations, to serve as distribution points for authorized microinsurance products offered by licensed insurance providers. Since many of these banks already have existing relationships with microfinance clients, they can more readily deliver a full range of financial services needed by their clients.

Banks are ideal insurance distribution channels as they are the trusted financial institutions in the countryside and have a deeper knowledge and understanding of the low income market.  This can only translate into better delivered products as well as lower transaction costs, ultimately benefiting the poor clients.  The BSP also envisions that this issuance will provide the impetus to eliminate informal insurance schemes as well as put an end to the unauthorized provision of insurance products.

Read the rest of the media release on BSP’s website.