Savings and Insurance

Savings Products

In 2007 VFC will be launching new savings products called Social Investor Term Deposit and Passbook Savings Account. This will help to create a balance between the depositors and borrowers.

Deposits received from the public will be a source of capital that VFC can then utilize to reinvest into the expansion of further lending activities.

New product development will ensure that VFC continues to build the community’s confidence as a trusted banking system.

Micro Insurance

Existing insurance substitutes for the poor in Cambodia are weak. In the case of death in the family or other emergencies, the poor rely on the neighbors’ contributions, savings and asset liquidation. Often, the exorbitant interest rates charged by moneylenders place tremendous financial strain on the family of the deceased. Negative life cycle events tend to erode clients’ net wealth. Clients resort to existing coping mechanisms because they have to, not because they want to.

VisionFund has been providing its credit clients with micro-insurance as “additional benefits” to help guarantee clients a safety net for financial peace of mind since late 2007.
 

The additional benefits can reduce financial burden for VisionFund clients, namely the poor who rely on their neighbors’ donations, savings and asset liquidation as insurance against unexpected death.
The additional benefits can be applied towards paying off some or all unpaid debt in case of the death of a VisionFund client and covering certain funeral cost. Only funeral contributions will be made if the client’s insured spouse or one of the two eldest children passes away.
Funeral contributions range from US$ 12 to US$ 75, as micro-insurance claims vary based on loan methodologies (community bank, solidarity group and individual lending) used by the client.

 As of Mar 2010, 725 of the insured 369,532 people families received insurance claims worth about US$ 72,974.26.