International Conference onIslamic Microfinance<br />Organized By :<br />CENTER OF ISLAMIC BANKING & ECNOMICS<br />Held At...
MicroTakaful – the way forward<br />Presented by:<br />Capt. M. Jamil Akhtar Khan<br />                                   ...
Contents<br /><ul><li>   Introduction
   MicroTakaful defined
   MicroTakaful schemes in other countries
   Prospects in Pakistan
   Incremental values – The Takaful advantage
   The way forward
   Conclusion</li></li></ul><li>Introduction<br />Micro-insurance defined:<br />“Risk-pooling products that are designed t...
Introduction Cont’d. …<br /><ul><li>   Microfinance can help people improve.
   Microtakaful will help them sustain their financial well being.
   Feeling of togetherness & security.
   Opens avenues for joint efforts for mutual benefits.
   Cooperative approach and outlook.
   Result – migration of individual level.
   Society benefits at large.</li></li></ul><li>Global Landscape<br />Only eighty million out of the world's 2.5 billion p...
Prospects in Pakistan<br /><ul><li> Serious efforts at national level only picked up</li></ul>  during the last decade.<br...
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Micro takaful by capt. jamil ahmed

  1. 1. International Conference onIslamic Microfinance<br />Organized By :<br />CENTER OF ISLAMIC BANKING & ECNOMICS<br />Held At:<br />Faisal Auditorium Islamabad - Pakistan<br />
  2. 2. MicroTakaful – the way forward<br />Presented by:<br />Capt. M. Jamil Akhtar Khan<br /> ACII, MCIT, Master Mariner<br />Managing Director<br />THE UNIVERSAL INSURANCE COMPANY LTD.<br />
  3. 3. Contents<br /><ul><li> Introduction
  4. 4. MicroTakaful defined
  5. 5. MicroTakaful schemes in other countries
  6. 6. Prospects in Pakistan
  7. 7. Incremental values – The Takaful advantage
  8. 8. The way forward
  9. 9. Conclusion</li></li></ul><li>Introduction<br />Micro-insurance defined:<br />“Risk-pooling products that are designed to be appropriate for the low-income market in relation to cost, terms, coverage, and delivery mechanisms”.<br />MicroTakaful refined:<br />“A mechanism to provide Shariah-based protection to the blue collared, under-privileged individuals at an affordable cost”.<br />
  10. 10. Introduction Cont’d. …<br /><ul><li> Microfinance can help people improve.
  11. 11. Microtakaful will help them sustain their financial well being.
  12. 12. Feeling of togetherness & security.
  13. 13. Opens avenues for joint efforts for mutual benefits.
  14. 14. Cooperative approach and outlook.
  15. 15. Result – migration of individual level.
  16. 16. Society benefits at large.</li></li></ul><li>Global Landscape<br />Only eighty million out of the world's 2.5 billion poor are currently covered by some form of micro insurance. <br />Only 3% of poor lives are insured in India and China.<br />Only 0.3% of the poor are insured in Africa. <br />In 23 of the poorest 100 countries in the world, there is currently no identified micro insurance activity.<br />
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  27. 27. Prospects in Pakistan<br /><ul><li> Serious efforts at national level only picked up</li></ul> during the last decade.<br /><ul><li> Advent of Microfinance banks.
  28. 28. Large rural/urban divide (65% : 35%)
  29. 29. 40% population below poverty level.
  30. 30. Scope for extensive work.
  31. 31. Mushroom growth of NGOs.</li></li></ul><li>Prospects in Pakistan (Cont’d. …)<br /><ul><li> Government’s initiatives – Rural support programs.
  32. 32. SMEDA.
  33. 33. Financial Support from ADB, WB, etc.
  34. 34. State Bank’s initiative – 20% branches of commercial</li></ul> banks required in rural areas.<br /><ul><li> Agriculture/Crop & Livestock Finance and Takaful.
  35. 35. Benefit of economies of scale to make these viable</li></ul> ventures.<br />
  36. 36. Potential areas of action<br />Construction of a House<br />Marriage<br />Death<br />Prolonged Illness<br />Importance of Risk/Economic Stress<br />Education of Children<br />Business Failure/Loss of Job<br />Birth of Children<br />
  37. 37. The Takaful Advantage <br />“ … they seemed satisfied with the convenience and affordability of the policy, but some thought that the premium should be reimbursed if they do not file a claim”.Excerpt fromThe Demand for Micro insurance in PakistanbyELIZABETH MCGUINNESS AND VOLODYMYR TOUNYTSKY MARCH 2006<br />
  38. 38. The Takaful Advantage <br />Share Holder<br />S H A R E H O L D E R S’ F U N D (S.H.F.)<br />Mudarib’s Share of PTF’s Investment Income<br />Wakalah Fee<br />Investment<br />Income<br />Management Expense of <br />the Company<br />Profit/Loss<br />Takaful Operator<br />Investment by <br />the Company<br />WAQF<br />Claims &<br />Reserves<br />Surplus (Balance)<br />Investment<br />Income<br />Operational Cost of Takaful / ReTakaful<br />Participant<br />P A R T I C I P A N T S’ T A K A F U L F U N D <br />(P.T.F.)<br />
  39. 39. The way forward<br />?????<br />NO<br />THEN<br />
  40. 40. The way forward<br /><ul><li> Tax incentives
  41. 41. Goodwill
  42. 42. Awareness
  43. 43. Extensive documentation
  44. 44. Distribution channels
  45. 45. Strategic alliances
  46. 46. Incentives & Awards
  47. 47. Setting up a dedicated micro-Takaful</li></ul> company!<br />
  48. 48. The way forward (Cont’d. …)<br />Setting up a dedicated micro-Takaful<br /> company!<br /><ul><li> Initiative by DFIs, NGOs, and other interested investors.
  49. 49. Ideal synergies with micro-finance institutions and other lending organizations.
  50. 50. Govt. to prescribe lower paid-up capital.
  51. 51. Managed by dedicated professionals. </li></li></ul><li>Current scenario<br />
  52. 52. What is required?<br />Where there is will, there is a way!<br />
  53. 53. Thank You<br />CENTER OF ISLAMIC BANKING & ECNOMICS<br />Head Office: 192- Ahmad Block, New Garden Town , Lahore, Pakistan Ph: +92-42-35913096-8, 35858990, 38407850 Fax: +92 -42-35913056E-mail : info@alhudacibe.com<br />Web: http://www.alhudacibe.com<br />

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