Known as Credit-Plus, the Microinsurance product will provide life and loan insurance benefits for for microfinance clients of Peoples Micro Bank.
The MOA was signed between Benny Popoitai, deputy governor of the Bank of PNG and chairman of the steering committee of the microfinance expansion project, Anthony Dela Cruz, CEO of the Peoples Micro Bank and Philip Tolley, managing director of Capital life Insurance at the Bank.
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Benny Popoitai said that the micro-insurance product will protect families from adverse economic effects in the event of a death.
"Papua New Guinea has a large illiterate population, so financial institutions must be innovative in designing and providing financial services that are appropriate for the bulk of the population," he added.
The new product will see that the insured is cleared of his/her financial obligation to the bank, leaving the remaining family debt free upon death of the microfinance client during the term of their loan.
Under the coverage, borrowers will have to pay a small premium at the commencement of a loan to leverage its benefits.
Additionally, the Microinsurance product will be launched initially in Oro with plans to roll it out to other provinces.
