162 Takaful and Mutual Insurance
Table 11.2 Availability of Conventional Microinsurance Products, by Country or Region Product Life and endowment
Health and critical illness
Crop and weather Property, asset, livestock Funeral Integrated package Rural insurance Group personal accident Unemployment Flood
Country or region India, Bangladesh, Sri Lanka, Nepal, Vietnam, Pakistan, Indonesia, Lao PDR; East Africa, South Africa, West Africa; Colombia, Guatemala, Mexico, Nicaragua India, Bangladesh, the Philippines, Cambodia, China; East Africa, South Africa, West Africa; Colombia, Mexico; Georgia, the Russian Federation India; East Africa, North Africa; Mexico, Nicaragua India, Nepal, Bangladesh; East Africa; Albania East Africa, South Africa, West Africa; Colombia, Mexico India India West Africa East Africa China
In late 2006, Takaful Indonesia started to collabo rate under the partner-agent model with Peramu, and in January 2007 they launched Takaful Micro Sakinah, a shariah-compliant credit life program.25 Earlier, Peramu had set up the Takmin Working Group to run the microtakaful program as a pilot project in Bogor, with technical assistance provided by the Microinsurance Association of Netherlands. Introduced in response to a request by an Islamic microfinance apex organization, the program seeks to provide risk mitigation based on mutual assistance and solidarity. The insurance term offered matches the financing period, which is usually between six months and one year, and is offered through Peramu, which serves as an intermediary to the market, as a mandatory group policy for sharia microfinance institutions.26 These institutions are wellestablished players in the local microfinance business, are close to the target group, and are generally well perceived by the poor. Premiums are calculated monthly on the individual balance outstanding and paid with each installment.27 The product does not involve additional riders. The benefit package is small and easy to understand, and 80 percent of the claims are settled within seven days. Takaful Indonesia distributes its product through Islamic and conventional microfinance institutions, as it has opted to cooperate with the latter to raise awareness of the concept of sharia-compliant microinsurance.28 The product is based on a wakala bil ujra contract (which is mandatory for sharia-approved insurance in Indonesia), whereas the operator receives a wakala fee (ujra) as well as a share of investment and underwriting surpluses. A very interesting