MICROFINANCE PUBLICATION ROUND-UP: Inclusix Index of Financial Inclusion in India; Obstacles to Access in Microinsurance; Microfinance in Kenya

“CRISIL Inclusix: An index to measure India’s progress on Financial Inclusion;” published by Credit Rating Information Services of India Limited (CRISIL); June 2013; 101 pages; available at http://crisil.com/pdf/corporate/CRISIL-Inclusix.pdf

Based on data from 2009 through 2011, this report gives an overview of the findings of the CRISIL Inclusix index, an analytical tool designed by Credit Rating Information Services of India Limited (CRISIL) to measure progress in financial inclusion in India at the national, regional, state and district levels. The index measures financial inclusion based on three variables: branch penetration, deposit penetration and credit penetration, assigning a score for each area of analysis. Based on 200,000 data points from 165 banks in 632 districts in India, the results suggest that while there are clear signs of progress at all levels, the overall national score is relatively low, reflecting the under-penetration of formal banking services in many parts of the country. The authors report that despite wide disparities among district-level scores, 618 out of 632 districts under consideration reported increasing scores through the study period. The authors find that growth in deposit penetration was the key driver of financial inclusion, and recommend that, going forward, stakeholders should focus on expanding branch networks and credit penetration to encourage the continued growth in financial inclusion in India.

“Removing Obstacles to Access Microinsurance;” by Eric Climon, Beatrice Harnasch, Peter Gross and Camyla Fonseca; published by the International Labour Organization (ILO); December 2013; 43 pages, available at http://www.microinsurancefacility.org/sites/default/files/MP27.pdf

This discussion paper offers an overview of barriers to access in microinsurance and a set of best practices suggested to overcome them. The study uses 10 case studies of microinsurance schemes to review three business processes related to expanding access to microinsurance: enrollment in services, collection of premiums and contract renewal. The authors identify burdensome procedures and insufficient customer service as major challenges to enrollment. Furthermore, inadequate infrastructure, irregular client income streams, poor access to financial services and a lack of channels for performing financial transactions all contribute to the difficulty in the collection of premiums. The authors indicate that rates of contract renewal often are marred by insufficient client satisfaction and process-related hurdles. The authors suggest that a clear and simple enrollment process that can be performed at numerous and convenient access points is necessary to promote enrollment. Mobile financial services can play a key role in facilitating premium collections, as can a well thought-out customer loyalty program that offers valuable incentives to pay premiums on time. Finally, to facilitate renewal, the authors recommend that microinsurers dedicate more resources to informing clients of the features and benefits of their products, offering timely reminders to clients to avoid lapses in coverage, and seeking to create a client-friendly renewal process.

“2013 Annual Report on the Microfinance Sector in Kenya,” published by MicroFinanza Rating; November 2013; 82 pages; available at http://www.microfinanzarating.com/newsletter/documenti/2013_annual_report_with_logos.pdf

This publication offers an analysis of trends and developments in the Kenyan microfinance sector from 2010 to 2012. The report begins with an overview of the macroeconomic environment in Kenya, followed by a generalized review of the geographic, structural, financial and operating characteristics of the microfinance sector. This latter section analyzes the size and outreach of the sector in terms of quantitative and qualitative metrics including: aggregate total assets; size of lending portfolios; number and geographic distribution of clients; and the profitability, efficiency and productivity of microfinance institutions (MFIs). The authors then discuss the quality of loan portfolios held by MFIs and offer a general competitive analysis of the sector. The study continues with an overview of the scope and breadth of the products and services offered by MFIs and by examining recent, relevant developments in the regulatory environment. The authors conclude by offering a brief operational and financial overview of the 32 financial institutions that provided data for the study.

By A’kos Szebeni, Research Associate

Sources and Additional Resources

Credit Rating Information Services of India Limited (CRISIL), “CRISIL Inclusix: An index to measure India’s progress on Financial Inclusion,” http://crisil.com/pdf/corporate/CRISIL-Inclusix.pdf

International Labour Organization (ILO), “Removing Obstacles to Access Microinsurance,” http://www.microinsurancefacility.org/sites/default/files/MP27.pdf

MicroFinanza Rating, “2013 Annual Report on the Microfinance Sector in Kenya,” http://www.microfinanzarating.com/newsletter/documenti/2013_annual_report_with_logos.pdf

MicroCapital, February 12, 2014, “Microcredit Interest Rate Determinants; Mobile Phones and Microinsurance; Health Financing Through Gifts and Remittances in Kenya,” https://www.microcapital.org/microfinance-publication-round-up-microcredit-interest-rate-determinants-mobile-phones-and-microinsurance-health-financing-through-gifts-and-remittances-in-kenya/

MicroCapital, January 12, 2014, “Accion Venture Lab Invests in Kenyan Mobile Money System Kopo Kopo, MeraDoctor of India,” https://www.microcapital.org/microcapital-brief-accion-venture-lab-invests-in-kenyan-mobile-money-system-kopo-kopo-meradoctor-of-india/

MicroCapital, October 29, 2013, “Lessons Learned from Morocco’s Microcredit Crisis; Using Microinsurance to Promote Universal Coverage; Remittances and Post-Conflict Economic Growth,” https://www.microcapital.org/microfinance-publication-round-up-lessons-learned-from-moroccos-microcredit-crisis-using-microinsurance-to-promote-universal-coverage-remittances-and-post-conflict-economic-growth/

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, October 10, 2013, “Airtel Kenya, MicroEnsure, Pan Africa Life Announce Launch of Mobile Life Insurance in Kenya,”  https://www.microcapital.org/microcapital-brief-airtel-kenya-microensure-pan-africa-life-announce-launch-of-mobile-life-insurance-in-kenya/

MicroCapital, August 28, 2013, “Bharti Airtel, MicroEnsure Launch Mobile Microinsurance Service in Africa,” https://www.microcapital.org/microcapital-brief-bharti-airtel-microensure-launch-mobile-microinsurance-service-in-africa/

MicroCapital, January 27, 2011, “Indian Rating Agencies, ICRA and Credit Rating and Information Services of India Limited (CRISIL), Predict Microfinance Institution (MFI) Consolidation Would Result From Reserve Bank of India (RBI) Proposals,” https://www.microcapital.org/microcapital-brief-indian-rating-agencies-icra-and-credit-rating-and-information-services-of-india-limited-crisil-predict-microfinance-institution-mfi-consolidation-would-result-from-reserve-ba/

MicroCapital Universe Profile: Credit Rating and Information Services of India Limited (CRISIL), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Credit+Rating+and+Information+Services+of+India+Ltd.+%28CRISIL

MicroCapital Universe Profile: International Labour Organization (ILO), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Labour+Organization+%28ILO%29

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

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

 

Similar Posts: