Deepening financial inclusion: the potential role of micro insurance in driving sanitation

June 2016

“Deepening financial inclusion: the potential role of micro insurance in driving sanitation”, is the third paper in the Financing Sanitation Paper Series.

The paper describes the possible role of micro insurance in development in general and in sanitation in particular. It also considers the micro insurance work completed by the Financial Inclusion Improves Sanitation and Health (FINISH) society, and then presents insights into the way forward, regarding the FINISH programme in Kenya (FINISH INK).

Micro insurance has a special place in financial inclusion as it protects wealth of low-income people against specific perils in exchange for regular payments (premium) proportionate to the likelihood and cost of risk involved.

The micro insurance intervention in FINISH INK is conceptualized around linkages between sanitation densities in a community and health micro insurance benefits to the community, among other objectives. However the authors concluded that they have experienced a rough and as of yet incomplete journey to achieve the objective of linking micro insurance to sanitation. Particularly as health care products limited to hospitalization somehow did not meet the FINISH requirements adequately.

Who is this for and why?

The use or linkage of micro insurance and sanitation is a relatively new field. The studies are still in the early stages therefore it requires more experimentation, trials and piloting in a number of ways and contexts to give traction to this prospect. Therefore this is an opener and background for more experts, workers and researchers to contribute.

It is important that is a financial instrument that might also assuage the fears and reduce the risks to the financial institutions that will be providing sanitation loan products.

National governments that have consideration for sanitation pool funds might also be able to take advantage of this instrument when it matures.

Additional details

PublisherFinancial Inclusion Improves Sanitation (FINISH), WASTE advisers on urban environment and development (WASTE) & ACTIAM
ThemesClimbing the sanitation ladder, Sanitation value chain, Support mechanisms, Sustainability and safely managed sanitation
ApproachesFinancing approaches, Sanitation approaches

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