The 2017 Brookings Financial and Digital Inclusion Project (FDIP) report evaluates access to and usage of affordable financial services by underserved people across 26 geographically, politically, and economically diverse countries. The report assesses these countries’ financial inclusion ecosystems based on four dimensions of financial inclusion: country commitment, mobile capacity, regulatory environment, and adoption of selected traditional and digital financial services. The report further examines key developments in the global financial inclusion landscape, highlights selected financial inclusion initiatives within the 26 FDIP countries over the previous year, and provides targeted recommendations aimed at advancing financial inclusion.
This paper discusses the role of microinsurance, in a broader social protection framework, as a possible instrument to mitigate risk and reduce vulnerability of poor and low-income households. The research studies microinsurance as an integral part of social protection systems in six countries: Bangladesh, India, Vietnam, Brazil, Cambodia, and Rwanda. It synthesizes the key messages of the country studies for better integration of microinsurance into social protection while considering the social protection principles of universality, solidarity, and equity. It further focuses on insurable risks suitable for microinsurance, such as sickness, old age, death, accidents and disabilities, and extreme weather events. The paper covers the following sections in detail:
- Concept of social protection and microinsurance with a focus on its relevance to the informal economy;
- Description and analysis of different social protection systems and microinsurance practices in six countries;
- Lessons learned from integrating microinsurance into social protection systems;
- Recommendations for extending coverage to the informal economy and other vulnerable groups, improving benefits, and increasing access to public social protection and microinsurance with a focus on approaches that can be replicated in other countries if adapted to fit a specific environment.
Lessons for the next wave of microinsurance distribution innovation
Achieving scale through cost-effective distribution is one of the biggest challenges facing insurers in low-premium environments. The emphasis is increasingly falling on innovative distribution models as alternatives to traditional microinsurance distribution approaches, which typically rely on microfinance institutions. During the last decade, insurance providers and their distribution partners have been experimenting internationally with developing and extending products to clients in new ways. This note takes stock of fourteen microinsurance business models in South Africa, Colombia, Brazil and India that use alternative distribution channels. It provides a summary of the cross-cutting issues and trends emerging across the different distribution models.
Past-due or non-collectible loans are part and parcel of the financial sector. As past-due rates surpass expected limits, though, this piece of the credit cycle can become a true problem.
While often seen as a final step in the lending cycle, collections actually plays a much more integral role in the overall process. In recent years microfinance institutions (MFIs) have sought to develop new and more effective strategies for collections. This increased attention to >collections is in part due to an industry-wide emphasis on credit promotion and analysis as well as to the changing and increasingly competitive environments in which MFIs are operating.
Drawing from the experiences of collections programs throughout Latin America and through the implementation of initial collections activities in India that are mainly focusing on Individual lending methodology, this InSight explores “best practices” and considerations that an MFI should take into account when attempting to successfully implement collections activities.