MICROFINANCE PUBLICATION ROUND-UP: Digital Financial Services Risk Assessment for Microfinance Institutions, Microinsurance Awareness in Ghana, G2P for Financial Inclusion: A Job Half Done

“Digital Financial Services Risk Assessment For Microfinance Institutions – A Pocket Guide;” by Tom Shaw, Marcella Willis, Daryl Skoog, Sonia Arenaza, Sudha Garg, Susan Salerno, Eve Hamilton and Shailee Adnolfi; published by The Digital Financial Services Working Group; September 2014; 15 pages; available at https://lextonblog.files.wordpress.com/2014/09/dfs_risk_guide_sept_2014_final.pdf

The authors of this “pocket guide”[1] argue for the importance of “Digital Financial Services (DFS)”[1] to reach low-income individuals who do not have access to traditional banking solutions. The authors base their findings partly on the fact that 7 billion mobile cellular subscriptions exist as of 2014. Meanwhile, 1.9 billion of the 2.5 billion unbanked individuals own a mobile phone. The authors encourage additional microfinance institutions (MFIs) adopt “mobile platforms and channels” to reach this group. They also discuss the “tangible benefits”[1] and “practical challenges”[1] of adopting DFS. In their view, MFIs interested in adopting DFS need to identify risks, assess their exposure to these risks and select appropriate mitigation strategies before they develop DFS. In order to assist with this process, the authors define the following risk categories: “strategic;” “operational;” “liquidity;” “legal and regulatory;” “country;” “reputation;” “credit;” and “market”[1]. They also offer examples to each of these as well as tools that can be used to assess these risks. The authors conclude the paper with a summary of field experiences with the aim of assisting interested organizations with their own analyses.

“Microinsurance Awareness Campaign Roadshows Ghana;” directed by Selikem Papa Nyomi; filmed and edited by Gold Garden Production, Coastal TV; September 2014; 17.15 minutes; available at https://www.youtube.com/watch?v=W6gnOASCmHU&feature=youtu.be

This video introduces the purpose and process of the “Microinsurance Awareness Campaign Roadshows”[2] that were conducted in Ghana in 2014 by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German Federal Enterprise for International Cooperation, on behalf of the Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ), the German Federal Ministry of Economic Cooperation and Development; the Ghana Insurers Association (GIA), an association of insurance providers in Ghana; and the National Insurance Commission (NIC), the organization that supervises and regulates the insurance sector in Ghana. The campaign promoted the concept of microinsurance and explained the benefits of purchasing insurance policies for low-income individuals and owners of micro-, small and medium-sized enterprises (SMEs). Three types of microinsurance policies were promoted: (1) fire insurance for “small-scale market sellers;” (2) “educational policies to ensure safe school career for one’s children;” and (3) life insurance. Held in the Aowin, Ho, Tamale and Techiman regions of Ghana, the events offered entertainment programs, film screenings, speeches and focus-group sessions.

“G2P for Financial Inclusion: A Job Half Done;” by Mr Lokesh Kumar Singh; published by MicroSave; June 2014; 3.19 minutes; available at http://www.microsave.net/resource/g2p_for_financial_inclusion_job_half_done#.VB5sxC6Sy4v

In this video, Mr Singh explains that India’s welfare system used to be based on “in kind subsidies”[3] and was burdened with high costs of delivery and “leakages”[3]. In response, the government is using a “conditional cash transfer”[3] program to deliver direct government-to-person (G2P) payments. Mr Singh argues that although the beneficiaries opened bank accounts and received their benefits via these accounts, the program did not achieve its full potential. Beneficiaries were not informed about other services that they could access through their accounts, and the business correspondent agent network was often not available to make these services easier to access. The speaker also proposes “target-based”[3] programs to increase the number of beneficiaries using more of their bank accounts.

By Alíz Crowley, Research Associate

[1] The Digital Financial Services Working Group, Digital Financial Services Risk Assessment For Microfinance Institutions – A Pocket Guide

[2] Gold Garden Production, Coastal TV, Microinsurance Awareness Campaign Roadshows Ghana

[3] MicroSave, G2P for Financial Inclusion: A Job Half Done

MicroCapital, April 1, 2014, “Water, Sanitation and Microfinance Toolkit 1: Introduction to Opportunities in Water, Sanitation and Hygiene Finance,” Published by Water.org, MicroSave

MicroCapital, August 6, 2013, Money Lenders Association of Ghana Signs Memorandum of Understanding to Provide Members with Microinsurance Products

MicroCapital, January 20, 2011, Small Enterprise Education and Promotion (SEEP) Network Releases “Pocket Guide to the Microfinance Financial Reporting Standards: Measuring Financial Performance of Microfinance Institutions”

MicroCapital Universe Profile: Small Enterprise Education and Promotion (SEEP) Network

MicroCapital Universe Profile: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

MicroCapital Universe Profile: MicroSave

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

Similar Posts: