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Microfinance

Innovations in Sikasso

by Maxime Prud'Homme, Bakary Traoré
In Mali’s southern-most region, several partners have launched a mutual health insurance. They include a local microfinance network, government agencies and international supporters. The plan is to break even by the end of 2013. Government subsidies are likely to help the scheme grow. The greatest challenge is to convince rural people of the benefits of an insurance. [ By Maxime Prud’Homme and Bakary Traoré ]

In 2007, the Mutual Regional Health of Sikasso (Mutuelle de santé régionale de Sikasso, MUSARS) went into business. With a population of around 2,6 million in 2009, Sikasso is primarily rural. The region is known for cotton cultivation. In Mali, Sikasso is also considered a leader in terms of mutual health insurance.

A number of mutual health schemes have come into being at the village level, for public servants and within professions such as teachers, for instance. Nonetheless, there are still only 91 mutual plans in Mali. They cover only around 215,000 policyholders, even though the mutual movement has gained momentum in the past few years.

A recent study conducted by the International Labour Organization (ILO) found that the rate of people with health care policies is very low in Mali, as in most other African countries aside from South Africa. In Mali, only 2.6 % of the population has some kind of insurance policy, with the figure at 1.9 % for healthcare. The figure for the poorest of the poor is practically zero.

The need to scale up

Based on recent experience, the relevant actors in the sector agree that the model of “micro-mutual village healthcare”, which is common throughout Mali, will hardly be successful in the long run. The scope of such micro-schemes with only a few hundred policyholders is simply too limited. Small schemes do not generate the revenues needed to cover the costs of full-fledged professional healthcare.

In search of a more innovative and viable model, partners from Mali, France and Canada teamed up in Sikasso to launch MUSARS as a region-wide project. The plan is to cover the entire region within seven years. It is expected that the MUSARS will break even by the end of 2013 with a total of at least 46,000 policyholders. A feasibility study was done in 2005, and MUSARS was launched in March 2007. Several partners are involved:
– The Union Technique de la Mutualité Malienne (UTM) is an umbrella organisation of more than 70 mutual healthcare schemes at present. Created in April 1998, it has since worked on behalf of the state to promote and extend mutual health coverage throughout the country.
– Kafo Jiginew is a microfinance network with more than 272,000 members. They are MUSARS’ primary target population. The leaders of Kafo Jiginew initially came up with the idea for MUSARS because they wanted to provide health insurance to their members.
– The National Directorate of Social Protection and Economic Solidarity (DNPSES) is a part of the Ministry of Social Development, Solidarity, and the Elderly (MDSSPA). DNPSES is in charge of regulating and promoting mutual healthcare in Mali.
– France’s Mutual Insurance of Commerce and Industry (Mutuelle Assurance des Commercants et Industries de France, MACIF) provides technical and financial assistance to MUSARS.
– The Society for Cooperation in International Development (SOCODEVI) is a network of Canadian cooperatives and mutuals that share technical expertise and know-how with partners in developing countries. SOCODEVI’s efforts in respect to MUSARS are funded by the Canadian International Development Agency (CIDA).
– SSQ is a Canadian financial and insurance group as well as a SOCODEVI member. Within SOCODEVI, SSQ has contributed in particular to the development of MUSARS.

MUSARS is committed to observing several principles in order to eventually reach viability:
– Mali’s healthcare services must become more professional. MUSARS can contribute to capacity development in the sector by implementing appropriate policies, procedures, and systems.
– As it is important to develop and strengthen relationships of cooperation and boost local capacities, the competence of Kafo Jiginew as well as the UTM must be made use of.
– To the extent possible, premium collection will be done by automatically withdrawing the money from clients’ savings accounts with Kafo Jiginew. Doing so is an innovative method in Mali.
– MUSARS is open to mergers with other mutual healthcare services in the region in order to grow fast.

MUSARS was founded in tough socio-economic times. For several years, the cotton price has been very low. Over the past few years, farmers saw their incomes drop by half. Making matters worse, prices for food and other bare necessities have skyrocketed. Moreover, there is a strong sense of uncertainty among farmers in Sikasso because the Mali Textile ­Development Company (Compagnie Malienne du Développement des Textiles, CMDT), a public-sector company, is in the process of being privatised.

Distributing health-insurance policies

The depressed economy has made it hard for MUSARS to sell health-insurance policies. Another challenge was that the public in general does not understand how insurance works, which is unsurprising, as the country does not have a tradition of insurance. Furthermore, poverty and beliefs in traditional practices lead rural people to turn to traditional healers first. Convincing clients of getting insured is MUSARS’ greatest challenge. In this sense, the experience in Mali reflects that of many similar experiments around the world.

For the staff and management at MUSARS, recruiting new policyholders is groundbreaking work. Lots of people have to learn lots of things, and that includes MUSARS staff and even board members.

In view of the obstacles, the partners who set up MUSARS soon revised their forecasts. It is simply impossible to sell as many policies as initially planned. The original plan was to break even by the end of 2011. It has been revised to the more realistic date of 2013.

The monthly premium for policyholders is the equivalent of € 0.58 per month for rural people and ­€ 0.70 for city dwellers. MUSARS requires all members of a household to be insured. This rule prevents selective coverage. Malian households, however, are large as the concept of the extended family prevails. A single household may include dozens of individuals.

A customer satisfaction survey was conducted by MUSARS in August 2009. It showed that low-income families in the region consider the rates acceptable and appropriate. The revenue thus generated is sufficient to cover all health risks, including major ones. This would become impossible with lower premiums. Therefore, the rates cannot be reduced, even though that would help to sell more policies.

There is reason to hope, however, that the distribution of policies will soon speed up. The government has decided to subsidise clients’ premium payments to mutual health insurances (see box, p. 70). MUSARS has signed an agreement with the MDSSPA and therefore can receive these subsidies. It seems likely that such government action will contribute to the long-term success of MUSARS.

Reaching out to the people

In spite of many difficulties, MUSARS has already become the second largest mutual healthcare service in the Sikasso region in terms of the number of policyholders; and it is on track to become the largest. The project partners and the MUSARS management are working on improving outreach. It is necessary to raise awareness and educate people about the protection from health risks through a mutual insurance. No doubt, part of the solution will be to better understand the target population. It is essential to know how families tick – and how, when and by whom decisions on healthcare are made.

More than 90 % of the people are Muslim, and polygamy is permitted. An extended family may thus include the patriarch, his wives and children as well as grandchildren of sons, who have remained in the household after marriage. The patriarch, however, is the one who ultimately decides, whereas it is the women who take care of children’s health. Healthcare services and products that reflect this situation would probably be more successful than those based on the model of rich nations. Relevant issues include healthcare itself, but also preventive care, education, modes of payment and others.

MUSARS is working on new ideas. One innovative approach is to allow cotton farmers to pay an annual premium when they have sold their harvest. Another is a 10 % discount for MUSARS clients and Kafo ­Jiginew members who have monthly payments automatically withdrawn from their bank accounts.