CDB to establish catastrophe risk fund
BRIDGETOWN, Barbados, Thursday July 21, 2011 – The Caribbean Development Bank (CDB) is to establish a multi-donor trust fund to support the establishment of a micro-insurance catastrophe risk facility, which aims to provide parametric insurance to protect micro-credit borrowers in Haiti against losses resulting from natural disasters.
CDB will act as trustee and administrator of the fund, Micro Insurance Catastrophe Risk Organisation Fund (MiCRO).
The Government of the United Kingdom will make an initial contribution of £955,000 (US$1.6 million) to the fund, and it is anticipated that other donors will contribute over the short to medium term.
In Haiti, microfinance institutions have flourished by providing small loans mainly to self-employed persons. The January 2010 earthquake has had a devastating impact on micro entrepreneurs, who experienced loss of assets, suppliers and markets.
The microfinance sector, which provides micro loans to sustain and stimulate many of these businesses, also suffered extensive losses.
MiCRO is expected to contribute to a more robust and sustainable private sector in Haiti, through improved access to financial services after a disaster, and to increasing the viability and sustainability of Haiti’s microfinance sector.
It will be reinsured by Swiss Re, one of the world’s largest and most diversified reinsurers.