MICROFINANCE PUBLICATION ROUND-UP: Funding Trends for Inclusive Finance; Developments in Agricultural Microinsurance; Financial Inclusion in South Africa: Survey Results

Trends in International Funding for Financial Inclusion;” by Edlira Dashi, Estelle Lahaye and Ralitsa Rizvanolli; published by CGAP (Consultative Group to Assist the Poor); December 2013; 4 pages; available at http://www.cgap.org/sites/default/files/Brief-Trends-in-International-Funding-for-Financial-Inclusion-Dec-2013.pdf

This report explores qualitative and quantitative data reflecting trends in the public and private capitalization of financial service providers offering inclusive finance products and services. Based on data from the annual “CGAP Cross-Border Funder Survey”, the report suggests that in 2012, despite pressure on public funding from a recessionary global macroeconomic environment, nearly 70 percent of the global funding allocated for financial inclusion came from public sources. Furthermore, the authors claim that public funding is growing at a faster pace than private funding, attributing this trend to private funders’ perception of the sector as lacking an adequate range of product and service offerings as well as sufficient institutional capacity to absorb additional capital. The report further addresses regional trends in financing as well as the financial instruments funders prefer, highlighting the continued prevalence of debt financing as the instrument of choice for both public and private funders.

“The Emergence and Development of Agricultural Microinsurance;” by Therese Sandmark, Jean-Christophe Debar and Clemence Tatin-Jaleran; published by Microinsurance Network; 2013; 80 pages, available at: (English) http://www.microinsurancenetwork.org/publication/fichier/Agriculture_Paper_Microinsurance_Network.pdf; (French) http://www.microinsurancenetwork.org/publication/fichier/Microinsurance_Network_Agriculture_FR_2014.pdf

This discussion paper is an overview of the current state of the global agricultural insurance sector. The authors review the recent history of the sector, identify current trends and highlight emerging opportunities for agricultural insurance in the context of a macro-economic environment characterized by concerns of commodity price volatility, food security and climate change. The discussion includes a comparative overview of agricultural insurance products, an exploration of the roles and responsibilities of stakeholders in agricultural insurance schemes, an analysis of strategic risk-management, and lessons learned from established and emerging agricultural insurance markets. The authors conclude that the success of agricultural insurance schemes will ultimately depend on making insurance products attractive to farmers on a cost-benefit basis through a mix of a coherent, enabling regulatory environment; technological innovation allowing for increased actuarial accuracy and mobile information delivery; improved incentive structures; and adequate marketing and education.

“Results of FinScope South Africa 2013,” published by Finmark Trust; November 2013; 65 pages; available at http://www.finmark.org.za/publication/results-of-finscope-south-africa-2013/

This report analyzes the results of the FinScope 2013 survey, an annual survey undertaken by Finmark Trust to gauge trends in the inclusive finance sector in South Africa. The results suggest that – while there has been a notable uptick between 2012 and 2013 in the number of borrowers applying for credit, banking and insurance products through formal channels – there has been a slight decline in the total number of people who have savings accounts. The report also highlights an area of concern: increasingly, South Africans are showing signs of over-indebtedness. According to the survey, over one third of active South African borrowers have engaged in at least one of the following: applying for debt-forgiveness or restructuring, having wages garnished, considering debt counseling, considering canceling insurance policies to fund debt repayment and being in arrears on payments for existing loans. The report also analyzes the causes for nearly 5.7 million people not using financially oriented social groups or institutions, concluding that the two underlying reasons are lack of sufficient income and remote location.

By A’kos Szebeni, Research Associate

Sources and Additional Resources

CGAP, “Trends in International Funding for Financial Inclusion,” http://www.cgap.org/publications/trends-international-funding-financial-inclusion

Microinsurance Network, “The Emergence and Development of Agricultural Microinsurance,” English version: http://www.microinsurancenetwork.org/publication/fichier/Agriculture_Paper_Microinsurance_Network.pdf; French version: http://www.microinsurancenetwork.org/publication/fichier/Microinsurance_Network_Agriculture_FR_2014.pdf

Finmark Trust, “Results of FinScope South Africa 2013,” http://www.finmark.org.za/publication/results-of-finscope-south-africa-2013/

MicroCapital, January 27, 2014, “Airtel, Nico Insurance Zambia to Offer Mobile Insurance,” https://www.microcapital.org/microcapital-brief-airtel-nico-insurance-zambia-to-offer-mobile-insurance/

MicroCapital, January 15, 2014, “African Centre for Catastrophe Risks Hosts “International Congress on Insurance and Reinsurance of Agricultural Risks”, January 29 – 31, 2014, Marrakech, Morocco,” https://www.microcapital.org/microfinance-event-african-centre-for-catastrophe-risks-hosts-international-congress-on-insurance-and-reinsurance-of-agricultural-risks-january-29-31-2014-marrakech-mo/

MicroCapital, October 22, 2013, “Airtel, Tanzania Postal Bank (TPB) Partner to Offer Mobile Banking Services,” https://www.microcapital.org/microcapital-brief-airtel-tanzania-postal-bank-tpb-partner-to-offer-mobile-banking-services/

MicroCapital, November 14, 2013, “Overcoming Barriers to Agricultural Microfinance,” https://www.microcapital.org/special-report-overcoming-barriers-to-agricultural-microfinance/

MicroCapital, November 10, 2013, “International Monetary Fund (IMF) Releases 2013 Financial Access Survey,” https://www.microcapital.org/microcapital-brief-international-monetary-fund-imf-releases-2013-financial-access-survey/

MicroCapital, May 13, 2013, “G20’s Global Partnership for Financial Inclusion Publishes Data on 192 Countries,” https://www.microcapital.org/microcapital-brief-g20s-global-partnership-for-financial-inclusion-publishes-data-on-192-countries/

MicroCapital, July 2, 2010, “G20’s Financial Inclusion Experts Group (FIEG) Releases Nine “Principles for Innovative Financial Inclusion” at Leadership Summit in Toronto, Canada,” https://www.microcapital.org/microcapital-brief-g20s-financial-inclusion-experts-group-fieg-releases-nine-principles-for-innovative-financial-inclusion-at-leadership-summit-in-toronto-canada/

MicroCapital Universe Profile: CGAP (Consultative Group to Assist the Poor), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29

MicroCapital Universe Profile: Microinsurance Network, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+Microinsurance+Network

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

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