A new approach to combating poverty is being studied in a research project led by the University of Cologne. Following the success of their international project 'Strengthening micro health insurance units for the poor in India', the university is now working on a similar initiative for Africa.

The concept is similar to 'micro credit' where people on low incomes are given access to small loans at low interest. It is hoped that affordable health insurance for the world's poor will help avert the risk of serious illness.

Private insurance barely exists for the rural and urban poor and in cases where products are available they are usually unaffordable. Public social insurance services are mostly insufficient and exclude those working outside the mainstream economy. The result is that nine out of 10 people in Sub-Saharan Africa do not have access to health or accident insurance. In addition they must pay high costs for medical treatment and healthcare out of pocket. Those living below the poverty line, which includes more than 40 percent in Sub-Saharan Africa, are hit particularly hard. They may have to take out loans, use up their savings or sell essential resources to pay for treatment, resulting in them falling into even deeper poverty.

An answer to their dilemma lies in the form of micro health insurance, which can help overcome the vicious circle of poverty and illness. Micro insurance delivers insurance services to the poor of the world's developing countries. Based in the local community, they are able to offer basic insurance services for low premiums which are affordable to the poor. These organisations also take on other roles such as educators in hygiene and health. They can also act as controllers of the health services market, in order to improve access and quality and avoid exorbitant prices.

The Department for Cooperative Studies at the University of Cologne has worked to improve the access to affordable and qualitative health services in developing countries for a number of years. In line with this, the EU has given €500,000 in funding to the research project 'Pro MHI Africa - EU-African university network to strengthen community-based micro health insurance', which is now underway. It will be carried out in collaboration with universities in Ghana, Malawi and Botswana within the next couple of years. The university network will analyse micro health insurance units in the participating countries. It also plans to introduce a common micro insurance diploma in order to prepare students to become policy makers for the expanding micro-insurance markets within their own countries.

The project will be led by Hans Jürgen Rösner, Professor for Social Policy, Cooperative Studies and Health Economics at the University of Cologne. Professor Rösner says, 'Micro health insurance is an important tool against poverty in developing countries. It constitutes specific self-help potentials of the target groups and can therefore correct the deficiencies of the health sector.'

Micro Insurance Academy

Source: Community R&D Information Service (CORDIS)