“A Structured Approach to Understanding the Financial Service Needs of the Poor in Mexico;” by Xavier Faz and Paul Breloff; published by CGAP (Consultative Group to Assist the Poor); May 2012; 4 pages; available at: http://www.cgap.org/gm/document-1.9.57615/Brief_MexicoSegmentation.pdf
This brief describes the results of a study performed by CGAP (Consultative Group to Assist the Poor), a US-based nonprofit policy and research center, to evaluate financial behavior by the low-income population in Mexico. The study included 426 households with income below USD 1440 per month and at least one economically active family member. Four primary areas were examined in the study: income and expense cashflows, aspirations, concerns and money management strategies. The study found that formal salaried workers generally save to meet their goals and would value a portfolio of savings products with different savings, return and liquidity options. Wage workers, who generally struggle to manage fluctuations in income, would value simple savings products that enable them to plan for expenses and term savings products to use toward long-term goals. Entrepreneurs would value a variety of credit options and transactional and payment products. Seasonal and agricultural workers value microsavings products, insurance and small-value credit options for emergencies and would benefit from financial planning and increased financial literacy. The authors conclude that microfinance institutions (MFIs) can be more effective at meeting people’s needs by segmenting the market in this way.
“A Friend Indeed: Evaluation of an Insurance Education Radio Campaign in Kenya;” by Craig Tower and Elizabeth McGuinness; published by Microfinance Opportunities; December 2011; 60 pages; available at: http://www.microinsurancefacility.org/sites/default/files/content/learning_journey/see_also/Impact%20Evaluation%20of%20ICE-K%20Project_FINAL%20.pdf
This document evaluates research on the Insurance Consumer Education – Kenya (ICE-K) project implemented by Microfinance Opportunities (MO), a US-based nonprofit research center that promotes client-led microfinance, and the Association of Kenyan Insurers (AKI), a membership organization of Kenyan insurance companies. The study focuses on one aspect of the project, a radio campaign intended to improve insurance literacy among low-income households in Kenya. The radio campaign included 13 weekly episodes on two different radio stations. Each episode included dramas, testimonials and advice, with some audience participation. The study measured: (1) awareness of insurance and risk management techniques; (2) insurance literacy, (3) insurance behavior, (4) attitudes towards insurance, savings and risk management and (5) levels of trust in insurance companies. The authors found that the radio campaign had the greatest impact on (1) awareness of insurance of insurance terms and products and (2) listener knowledge of insurance terms and policies. However, the study found a lack of change in positive attitudes towards insurance and trust of insurance companies, which the authors attribute to previous bad experiences with insurance companies. The study concludes that overall, radio is an effective tool for encouraging behavioral change, but suggests a more prolonged radio program to maximize results.
“Voting the Double Bottom Line: Active Governance by Microfinance Equity Investors;” by Katharine McKee; published by CGAP (Consultative Group to Assist the Poor); May 2012; 27 pages; available at: http://www.cgap.org/gm/document-1.9.57715/FN79.pdf
This focus note interprets a set of interviews with leaders of development finance institutions (DFIs), microfinance investment vehicles (MIVs) and microfinance institutions (MFIs) in order to provide an assessment of microfinance governance. Analysis of the interviews found that most respondents feel stronger MFI governance is needed and might improve individual retail providers as well as the microfinance sector as a whole. The authors offer seven key findings: (1) investors in MFIs can fill executive board seats, encourage MFIs to adopt good practices and model active ownership; (2) the standard roles of corporate governance are relevant for MFI governance as well; (3) MFI crises and failures have weakened governance and underscored the capability of boards to help MFIs through tough times; (4) equity investors are not capitalizing on opportunities to strengthen MFI governance; (5) MFI managers are often reluctant to give up control; (6) MFI governance practices demonstrate common weaknesses such as lack of clarity on the respective roles of management, the board and shareholders; and (7) governance structures and processes need to adapt to market changes. The authors conclude that improving governance will require strategy, resources and staying power as well as adequately capitalized and responsible providers.
By Charlotte Newman, Research Associate
CGAP (Consultative Group to Assist the Poor) is a US-based nonprofit policy and research center dedicated to providing financial access to poor people worldwide. CGAP is supported by approximately 30 development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors. CGAP reports taking in USD 20.9 million in total revenue for fiscal year 2010.
About Microfinance Opportunities
Microfinance Opportunities (MO) is a US-based microenterprise resource center that promotes client-led microfinance. Established in 2002 as a nonprofit organization, MO’s goal is to increase access financial services. It focuses on financial education, microinsurance, and client assessment. MO does not report data to the MIX market.
Sources and Additional Resources:
“A Structured Approach to Understanding the Financial Service Needs of the Poor in Mexico,”
“A Friend Indeed: Evaluation of an Insurance Education Radio Campaign in Kenya,” http://www.microinsurancefacility.org/sites/default/files/content/learning_journey/see_also/Impact%20Evaluation%20of%20ICE-K%20Project_FINAL%20.pdf
“Voting the Double Bottom Line: Active Governance by Microfinance Equity Investors,” http://www.cgap.org/gm/document-1.9.57715/FN79.pdf
MicroCapital.org story, June 2, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Global Microfinance Equity Valuation Survey; Microfinance Governance Indicators; Audio Report: Role of Brokers in Microinsurance,” http://www.microcapital.org/microfinance-publication-round-up-global-microfinance-equity-valuation-survey-microfinance-governance-indicators-audio-report-role-of-brokers-in-microinsurance/
MicroCapital.org story, May 23, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Microfinance Information Exchange Diamond Rating System; Savings-Linked Microinsurance in India; Banking Correspondents in Brazil,” http://www.microcapital.org/microfinance-publication-round-up-microfinance-information-exchange-diamond-rating-system-savings-linked-microinsurance-in-india-banking-correspondents-in-brazil/
MicroCapital Universe Profile: CGAP
MicroCapital Universe Profile: Microfinance Opportunities
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