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AOA Member Report [#1] CARD MBA, Philippines

“CARD MBA in the Philippines continues its amazing growth through collecting contributions of 15 pesos (about 40 yen) per week”

Yukari Nishio
Research & Study Department
Japan Cooperative Insurance Association


The Asia and Oceania Association (AOA) of the International Cooperative and Mutual Insurance Federation (ICMIF) organized a visit last August 1-3, 2016 to CARD Mutual Benefit Association, one of its member organizations in the Philippines.

The visiting group consisted of 22 participants. Thirteen (13) of which are from Japan, including representatives of the National Mutual Insurance Federation of Agricultural Cooperatives, the National Federation of Workers’ and Consumers’ Insurance Cooperatives, Japan CO-OP Insurance Consumers’ Co-operative Federation, the University Co-operatives Mutual Aid Federation, Asia Affinity Holdings Limited, and the Japan Cooperative Insurance Association. They are alongside Associate Prof. Futoshi Okada of Nihon University. The rest of the participants are representatives from Thailand, Sri Lanka, Philippines, India, New Zealand, and Great Britain.

Microinsurance in the Philippines is experiencing rapid growth, with its number of members rising by more than tenfold over the past five years. CARD Inc., a microfinance organization and CARD Mutual Benefit Association, a microinsurance organization, both members of CARD MRI[1] —play pivotal roles to this growth.


Microinsurance trends in the Philippines[2]

One-fourth of the 104.28 million population of the Philippines is said to be living in poverty. This is despite its GDP growth at a rate of 5.7% in 2015, and a projected growth as the world’s 16th-largest economy by 2050. Given its geographical location, it has been known as a disaster-prone country, particularly to typhoons[3]

These typhoons have become more devastating in recent years. One example is Typhoon Haiyan (local name: Yolanda) in 2013. Haiyan’s wrath resulted to an estimated approximately USD 13 billion of loss[4] hence an increase in poverty by 1.9%.

These kinds of disasters could lead to financial instabilities. This is one of the examples of instances when microinsurance can play an important role. It can give solutions against extreme disasters through life insurance to the impoverished sector of the Philippines society. The Insurance Commission[5] has recorded the microinsurance penetration rate in the Philippines at 20.4%, the highest in Asia followed by Thailand at 14.1%, India at 8.9%, and Bangladesh at 5.1%.

The growth trend in recent years is summarized below:

2010 2012 2014
Members 3.1 mil. 19.8 mil. 31.1 mil.
Number of products 119
Life-insurance: 69
Casualty-insurance: 50
Life-insurance: 81
Casualty-insurance: 81
Number of implementing organizations 6 18 22

The development of microinsurance in the Philippines can be described in two stages

First stage: Before 2006 until 2009

Mutual aid efforts for events of death or accident were available before, but they lack standards to regulate the said operations. There were concerns about consumer protection and maintaining the financial security of the implementing organizations. Hence the government, through the Insurance Commission, issued Joint Memorandum Circular 9-2006, otherwise known as the Microinsurance Regulatory Framework. This established the regulatory standards that should be followed by microinsurance providers, namely:

  1. microinsurance premiums should not exceed 10% of pay,
  2. the content of microinsurance products must be simple,
  3. the policies and terms are simple and easy to understand,
  4. the methods and frequency of collecting contributions should be suited to the capacity of the insured,
  5. the amount of insurance benefits should not exceed 500 times daily pay, and
  6. that implementing organizations maintain capital of at least 5 million pesos (12.5 million yen)
Second stage: 2010-2011

The government encouraged the use of microinsurance while at the same time firming up its policies to protect policyholders. It established a certification system with requirements for establishment of a microinsurance organization (also known as a mutual benefit association or MBA) and regulating training for insurance sales qualifications and product development. Regulations required that policy contracts should be written in English, Filipino (Tagalog) or local dialect. It also requires insurance benefits be paid within ten (10) days, together with prescribing requirements related to policy holder protection, financial training, and various management indicators. They also established an alternative dispute resolution (ADR) system for consumer protection and education regarding financial literacy.

Because of these measures, the number of members in microinsurance programs has reached 31.1 million in 2014.

CARD MRI: The Partnership of CARD Inc. and CARD MBA [6]

From its humble beginnings with a secondhand typewriter as an initial asset, the vision of CARD Inc. to be the “world-class leader in microfinance and community-based social development undertakings that improves the quality of life of socially and economically challenged women and families towards nation building.” [7] has become a reality. It aims to eradicate poverty in the Philippines and establish financial organizations and businesses owned and operated by the marginalized poor. As of June 2016, its microfinance customers reached the 3.6 million mark and its penetration rate was 15%, mainly among households in the Philippines. Its balance of loans was 13.9 billion pesos (34.7 billion yen) while its balance of deposits was 10.3 billion pesos (25.7 billion yen). It has a workforce of 10,763 people, 2,304 offices, total assets of 29.4 billion pesos (73.5 billion yen), liabilities of 21.0 billion pesos (52.5 billion yen), and equity capital of 8.4 billion pesos (21.0 billion yen).

The secret to its success is the fact that it lends money to women only, who borrow funds as needed solely for family meals and their children’s education. Women are also careful to repay the loans so that they can borrow again in the future. This approach has resulted in a very low default rate of just 0.51%.

CARD Inc., as part of CARD MRI, has activities in areas other than microfinance such as scholarship programs for women and children, development of local industries including handicrafts, providing healthcare and traveling sales of pharmaceuticals in rural communities, and retail sales.

Another member institution of CARD MRI, CARD Mutual Benefit Association (MBA) began as a group credit life insurance for microfinance borrowers. It was formally established in 1999 as a nonprofit organization owned and operated by its insurance policyholders with a vision of being the “global leader in the microinsurance industry, owned and led by members upholding its core values” [8]. As of June 2016, it has a 37% market share of microinsurance in the Philippines. Its microinsurance program has 11.45 million members, with a penetration rate of 11% of the Philippine population. The organization consists of four (4) head office divisions, ten (10) districts, forty-nine (49) branch offices, and 1,284 members of sales staff (who also handle microfinance sales). In each branch or office, there is one manager and three to four staff members. Each staff member is responsible for three meetings per day.

A branch of CARD MRI Group

CARD MBA effectively uses in its operations the infrastructure of the CARD MRI’s microfinance businesses[9]. In this business model, all members of the CARD MRI’s microfinance businesses are required to join CARD MBA. In this structure, the partnership of the MRI and MBA is very crucial. The CARD MRI staff known as the account officer collects CARD MBA insurance premiums together with loan payments during center meetings.

Center meetings are held weekly at fixed times. In each center, there is a minimum number of thirty (30) to a maximum of fifty (50) members. Each center is headed by center chiefs. These centers are located in neighborhoods also locally known as barangays. A meeting lasts between 30 to 60 minutes and follows a set agenda. It usually includes a credit with education seminar by the microfinance account officer. Although it is held weekly in principle, centers with superior operational performance based on attendance and payment rates may be permitted to meet monthly.

A center meeting usually follows the following agenda: (The center chief presides with minutes of the meeting taken by the secretary) [10]

  • opening prayer
  • reciting of the CARD MRI member’s pledge
  • reciting of CARD MRI employees’ pledge
  • singing of the CARD MRI song
  • taking attendance
  • collecting of weekly loan payments and insurance premiums
  • making entries to deposit passbooks
  • reviewing the minutes of the previous meeting
  • discussing the items on the agenda
  • training and learning conducted by CARD MRI’ account officer
  • reporting on results of loan applications through the previous week and new and withdrawn members, submission of loan applications, examination and recording of amounts of funds collected, announcing attendance rates and repayment rates
  • a meeting ends with the closing prayer.

Center meetings serve as opportunities for community residents to communicate with each other to discuss necessary issues in the community. They also serve as a check and balance capacity among members, through announcement of the state of loan repayment and inevitably insurance premium payments by each borrower.

The scene of a center meeting

CARD MBA also promotes the 1-3-5 Day Target in claims settlement. This system aims to deliver claims settlement through fast and efficient processing of required documents. It is as follows:

  • 1 day-claim on death of a member will be released the day after MBA’s receipt of notification
  • 3 days-claim on the death of a legitimate spouse or child will be released three days upon MBA’s receipt of formal notification, with all the documents required
  • 5 days-claims involving complicated documentation will be processed five days after MBA’s receipt of notification, with the documents required

While the Insurance Commission regulation requires payment of insurance claims within 10 days, CARD MBA pays 97% of its insurance claims within five days.

The strengths of the MBA business model lies in fostering a sense of participation and ownership among all members. It also offers innovative yet inexpensive and familiar insurance products while utilizing the organizational structure of microfinance for promotion and collection of contributions. Other notable effective approaches are providing and sharing expertise with other microfinance organizations and cooperatives, and securing advantages over private insurers through the 1-3-5 day target in claims settlement.


Microfinance involves more than just lending. It also entails providing support such as advice on starting businesses and loan repayment. Despite its high interest rates due to its higher costs, it gives the earnings of its lending business back to the community benefiting its members and the community and eventually contributing to nation building. Although I already had been aware of the term “microfinance” and its general meaning, this visit proved an excellent experience for me. I was able to see for the first time the actual circumstances of microfinance with my own eyes. As one of the people who work in cooperatives and mutual aid societies in Japan, the experience of learning about colleagues overseas working toward the same goals was very inspiring and motivational. I definitely would recommend readers to get a first-hand look at the CARD MRI Group’s activities if they have the opportunity. This can be supported by the expressions on the faces of the local people gathering in CARD MRI center meetings, which are bright and full of vitality, which is also a sign that CARD MRI staff are beloved by the locals as customers.

A place of center meeting

1.CARD MRI- Center for Agriculture and Rural Development Mutually Reinforcing Institutions
2.Excerpts from the lecture “The Policy and Regulation for Microinsurance in the Philippines” given by Shayne Bulos, Supervising Insurance Specialist, Microinsurance Division, Insurance Commission, Republic of the Philippines
3.The Human Cost of Weather Related Disasters” report by the United Nations Office for Disaster Risk Reduction (UNISDR) and Centre for Research on the Epidemiology of Disasters (CRED), 2015
4.Investing in Resilience – Ensuring a Disaster-Resistant Future, ADB, 2013
5.Insurance Commission- The insurance regulator in the Philippines
6.Excerpts from the Welcome Remarks of Dr. Jaime Aristotle Alip, CARD MRI founder and managing director and from the lecture “The CARD MBA Business Model: Pioneering Microinsurance in the Philippines” by May Dawat, CARD MBA General Manager
9.CARD MRI microfinance businesses includes CARD Inc., CARD Bank, CARD SME Bank and Rizal Bank Inc.
10.As observed during the center visit

  • The English version of this report was reproduced by courtesy of Japan Cooperative Insurance Association and was partially edited thanks to the support from Ms. Lee P. Malapad of RIMANSI, Phillipines.
  • For the details of the Study Visit, please also see this page.
  • To understande the ICMIF’s initiatives to promote the mutual microinsurance globally, which is called “5-5-5 Mutual Microinsurance Strategy”, this page might be useful.

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