To sell microinsurance the loan officer will not only have to persuade her clients to buy something that might be of no use for them but she also has to invest extra time per client in order to educate them about the product. Therefore financial institutions have to first convince the staff about the utility of the product in order to sustain it in the long-term. From an institutional strategic point of view it is important to train the loan officers about the importance of microinsurance. First, it offers a risk management tool to their clients. Second, it can offer clients a smooth cash flow during financial emergencies without incurring additional debt or risk-dipping into their hard earned savings.
From the institutional point of view training about selling microinsurance must translate to the loan officer’s benefits as well. If the loan officer’s clients have insurance:
- They will continue to pay back the loan installments in a timely manner even during financial emergencies, resulting in a healthy PAR (portfolio at risk) for the loan officer
- This would result in better incentives
- The loan officer can demonstrate the organization’s commitment to the welfare of the clients and thus strengthen their personal relationship with the clients