Nico General Insurance Company Limited is taking steps to start providing insurance for village savings and loan schemes (VSLs) popularly known asBanki Mkhonde as one way of mitigating risks in the groupings which are growing by the day.
Nico General Insurance chief operating officer Donbell Mandala said the institution is at the initial stage where it has already partnered with Nico Life Insurance Company Limited to implement the exercise when it rolls out.
He said: “We have already partnered our sister company Nico Life Insurance which is going to implement this because of its understanding of the microfinance sector.
“Village savings and loan schemes are becoming more active, that is why we need to take an initiative to have them insured.”
Mandala was speaking on Tuesday during a meeting with stakeholders in the insurance business in Lilongwe.
During the opening of the third national Financial Literacy Week in November last year, Reserve Bank of Malawi governor Charles Chuka said it is difficult for the institution to support or receive complaints from VSLs because they are not incorporated in the formal financial sector.
If the suggestion to have the VLS insured succeeds, the groupings will be expected to pay premiums, thereby protecting members from the risk of losing property in case of in eventualities.