TYM's Mutual Assistance Fund, Vietnam

This paper discusses the Mutual Assistance Fund (MAF) launched by the TYM (Tao Yeu May) fund in 1996 to protect against the death of a client or client's family member. The TYM fund is a Grameen replication project managed by the Vietnam Women's Union (VWU), a mass-based national organization to promote the welfare of Vietnamese women.

The paper presents important characteristics of the MAF:

• Premium charged on flat rate rather than a rate based on the size of the loan or the number of family members covered;
• Weekly contributions of VND 200 (USD 1 cent);
• Outstanding loan balance written off upon client's death, also family receives VND 400,000 (US $26) to cover funeral expenses.

Some of the strengths of MAF, according to the paper, are:

• Appropriate product design for low-income rural households;
• Easy start-up and management;
• Streamlined claims procedures.

The paper also presents lessons from MAF's experience in microinsurance. These are:

• Focus must be on long-term sustainability maintaining affordable pricing as well as products responsive to clients' needs;
• Adequate staff training and client sensitization is necessary;
• Periodic adjustment of premiums and benefits according to changing risk profiles of clients is essential.