Enabling low-income households to manage untimely deaths



The 135 000 membership of the Comsip Cooperative Union that save and invest their income in rural and peri-urban areas in Malawi now have a reprieve.

This follows a partnership between Comsip Cooperative and Nico Life Insurance Company Limited that will see them pay K600 per year in the funeral scheme insurance, including their nominated beneficiaries and claim K75 000 upon death. 

If all the 135 000 members register in the Comsip Funeral Scheme, it means a massive injection of insured members into the insurance industry in Malawi, whose penetration stands at 1.4 percent, according to the Reserve Bank of Malawi (RBM). The number of people on insurance in Malawi is at paltry 240 000 against a population of 17 million.

The penetration rate does not compare well with other countries in Africa and beyond. In South Africa, the penetration rate is at 16.9 percent, Namibia 6.7 percent and United Kingdom 10.5 percent.

As it were, the low penetration into the insurance industry means that the rural poor who are graduating from the yolks of poverty through Comsip initiatives of savings and investment could be in the bracket of those that have inadequate access to health care services and this leads to untimely deaths, one of the major risks faced by many rural poor farmers.

The untimely death of a bread winner, especially member of Comsip Cooperatives has major financial implications on family because through the Community Savings and Investment Promotion (Comsip), members have built capacity and inculcated a culture of savings and investment.

Thus families that are above the poverty line may also be starkly pushed below it and the impact would get compounded if death occurred after prolonged illness since in that situation the family also incurs expense on medical treatment.

The affected families borrow or sell assets to take care of contingencies, burial and funeral expenses including rituals.

But today with the introduction of financial inclusion process, the Comsip Funeral Scheme, which will cover at least 135 000 members, members are a happy lot.

When Comsip broke the news to its members that had gathered at the grounds of Senior Group Village Head Sankhanichigwedera in Traditional Authority Njewa in Lilongwe on a Friday morning, there were cheers of celebrations.

“We are now covered,” remarked Rosina Kafatatha vice-chairperson of Mpita Comsip Cooperative.

“Death as it were, is a big challenge when a member dies. It is a burden. But look, with the introduction of the scheme we will surely be covered.”

Comsip Cooperative Union Limited, a member-owned organisation born out of the need to serve the community members who are organised into community savings and investment groups and multipurpose cooperatives, has partnered Nico Life Insurance to provide insurance cover to its members in form of Group Funeral Insurance to all Comsip affiliates in the country.

Nico Life senior group business manager Lilian Moyo told the gathering in the sweltering heat they are delighted to partner Comsip, whose primary objective is to build capacity and inculcate the culture of savings and investment in both rural and urban communities.

She said: “By enhancing the traditional savings and investment practices, the funeral insurance will enable low-income households to manage risks associated with ill preparedness for untimely death.

“Our funeral plan is affordable, easy and sustainable. It conforms to micro-insurance principles and safeguards members from unexpected expenses associated with funerals.”

Comsip board chairperson Canaan Gondwe said the insurance scheme was inspired by the high number of uninsured rural masses and is also responding well to government initiative to have more Malawians insured.

“Comsip is trying to bring in a product of insurance so that we may be covered in times of in eventualities,” he said.

“The Comsip Funeral Scheme provides peace of mind to cooperative members as they engage in activities that enhance their lives,” he said.

The funeral scheme provides a funeral cover to Comsip Cooperative members by paying out a lump sum benefit in the event of death of one of its registered members to assist with funeral costs such buying a coffin and food.

Any Comsip Cooperative member can register for the Group Funeral Scheme by paying K600 per year to be covered for that year and their nominated beneficiaries will get K75 000 through Airtel Money within 24 hours of communicating the same to Comsip.

Lilongwe District Council chairperson John Kawinga,  who was guest of honour at the launch of the product, expressed his joy with the arrangement, noting that the scheme dubbed Thandizo Lopezekeratu pa Nthawi ya Zovuta is a model of modesty to serve community members and lessen burden of Comsip members.

He  encouraged people that are not yet members of Comsip groups to enroll and benefit from the scheme, apart from other other Comsip initiatives such as trainings in group dynamics, financial literacy, business management and cooperative management.

Comsip chief executive officer Tenneson Gondwe, who chronicled the genesis of Comsip, explained that there is a lot of demand for additional services and products and the launch of the Comsip Funeral Scheme is just but one of the many products that have lined up.

“Another service is the introduction of Airtel Money to all Comsip affiliates which will boost the cooperatives and clusters’ businesses.

“We are also proposing the introduction of investment loans to all Comsip members and this is in the pipeline,” he said.

Meanwhile, Comsip has mobilised an estimated K2.9 billion in savings which are intermediated among members in form of loans.

Said Gondwe: “We feel that these are significant achievements that have empowered our members to understand and participate fully in the operations of their cooperative and individual businesses.

“These have had immediate impact on the growth of their savings consequently improving their livelihoods and the introduction of the funeral scheme will further boost their businesses because they are assured that at least their nominees will still have shares invested in cooperatives,” he said.

Comsip implements a number of projects within the livelihood and skills development component of the Masaf IV project funded by the World Bank and these include the Legumes Enterprise Structured Production (Lesp), Value Chain and Nutrition  and Health Micro Project.

Comsip has supported a total of 46 clusters in various value chain productions, including poultry and poultry feed making, irrigation, honey, wine making, bakery, resource centres, warehousing, juice, and soap making, piggery and dairy.

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