Parametric Insurance for Loan Interest Payments
Why is it relevant?
Severe weather can disrupt daily business and hence income for SMEs. Income disruption can further hurt the cash flow situation and hence impact the loan interest they owe to their banks. Any late or non payment can lead to penalties or lapse of other insurance products.
How does it work?
Insurance coverage pays a pre-agreed amount (eg 3 month loan interest) per beneficiary covered in a group policy plan through Banks, when a storm is reported in the risk area.
Who is it designed for?
SMEs in exposed coastal areas suffering income losses from storms and heavy rains with direct impact on their loan interest payments.