MICROFINANCE PUBLICATON ROUND-UP: Rural Finance in Laos, Micro-Health Insurance in Rural India, Distribution Models in Mobile Financial Services

“Rural Finance in Loas: GIZ Experience in Remote Rural Areas;” by Klaus Prochaska, Dennis Fischer, Philipp Hauger, Tony Deary; published by Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ); December 2012; 40 pages; available at: http://www.microfinancegateway.org/gm/document-1.9.61072/Rural_Finance_in%20Laos_Paper_GIZ_2012.pdf

This report presents an analysis of the “Microfinance in Rural Areas – Access to Finance for the Poor” project, which is operated by Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), an agency of the German Government, in partnership with the Bank of Lao, the central bank of Laos. “The project provides macro-level policy advice to the Bank of Lao and works towards increasing access to financial services in remote areas. It does so through an ecosystem of community-managed financial institutions or village banks, which are supported by provincial network support organizations (NSO).” In the Lao provinces Attapeu, Luang Namtha, Sayaboury and Savannakhet, GIZ supports 260 village banks and five NSOs, which “provide technical assistance in the form of financial education, book keeping and procedural guidance to village banks and also act as financial intermediaries.” The NSO in Sayaboury, which has six staff serving 45 village banks that have a total of approximately 5,000 clients, is deemed “successful” due to its collection rate of approximately 20 percent of total annual operating expenses in the first six months of 2012. The NSO offers a “liquidity management service,” which allows village banks with a savings surplus to earn an annual interest rate of 12 percent. “The NSO in turn uses these funds to finance its credit lending activities” to other village banks, allowing the NSO to self-fund approximately 90 percent of its wholesale lending activity. This highlights “the healthy relationship between village banks and their NSO.” The authors argue that because approximately 5 percent of savings in the four Lao provinces “are ever deposited into a bank…there is no doubt that the formal financial system has not yet fully permeated rural Laos with sufficient savings options.” Having found the model to be successful, GIZ plans to expand it during 2013.

“What is a Health Card Worth? An Evaluation of an Outpatient Health Insurance Product in Rural India;” by Ajay Mahal, Karuna Krishnaswamy, Rupalee Ruchismita and D. Girish Babu; published by the Microinsurance Innovation Facility; February 2013; 33 pages; available at: http://www.ilo.org/public/english/employment/mifacility/download/repaper30.pdf

The Care Foundation, an Indian nonprofit that seeks to increase access to affordable healthcare, launched a project in 2009 that sent low-skilled community health workers (CHWs) to 50 villages in the Indian state of Maharashtra to provide primary and preventative care consultations. This study analyzes a randomized controlled trial evaluating the impact of this initiative. CHWs sold health insurance cards for INR 300 (USD 6), which allowed free visits to CHWs and the local primary care clinic for a family of four for one year. The authors find that on average people who had the health insurance cards visited CHWs 5.6 times more often than those without insurance, which resulted in shorter overall hospital stays and lower out-of-pocket medical expenses. The authors conclude that outpatient insurance coverage such as the cards should be bundled with inpatient insurance to incentivize visits to CHWs, reducing inpatient costs.

“New Sales and Distribution Models in Mobile Financial Services;” by Jake Kendall, Graham Wright and Mireya Almazan; published by the Microinsurance Centre; 2013; 18 pages; available at: http://www.microinsurancecentre.org/resources/documents/doc_download/999-new-sales-and-distribution-models-in-mobile-financial-services.html

This report analyzes trends and challenges in the mobile financial services industry. It highlights the rapid growth in the use of mobile money platforms to promote financial inclusion, such as the growth of the M-Pesa platform, a mobile money service launched by Kenya-based telecom company Safaricom in 2007, which is now used by most adults in Kenya. The report finds, however, that offering services other than payments, such as insurance, requires labor-intensive specialization and management challenges that incur high personnel costs. Conveying a clear value proposition to clients is also challenging in the mobile-financial services setting due to lack of familiarity and understanding regarding the product.

By Nicole Boyd and Sam Allmendinger, Research Associates

Sources and Additional Resources:

“Rural Finance in Loas: GIZ Experience in Remote Rural Areas,”
http://www.microfinancegateway.org/gm/document-1.9.61072/Rural_Finance_in%20Laos_Paper_GIZ_2012.pdf

Microinsurance Innovation Facility. “What is a Health Card Worth? An Evaluation of an Outpatient Health Insurance Product in Rural India,”
http://www.ilo.org/public/english/employment/mifacility/download/repaper30.pdf

Microinsurance Centre. “New Sales and Distribution Models in Mobile Financial Services,” http://www.microinsurancecentre.org/resources/documents/doc_download/999-new-sales-and-distribution-models-in-mobile-financial-services.html

MicroCapital. March 24, 2013, “MICROCAPITAL BRIEF: Pro Mujer Bolivia, Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) Partner to Raise Awareness of Violence Against Women,”
https://www.microcapital.org/microcapital-brief-pro-mujer-bolivia-deutsche-gesellschaft-fur-internationale-zusammenarbeit-gmbh-giz-partner-to-raise-awareness-of-violence-against-women/

MicroCapital. April 18, 2013, “MICROFINANCE PAPER WRAP-UP: ‘Why People Do Not Buy Microinsurance and What Can We Do About It;’ by Michal Matul, Aparna Dalal, Ombeline De Bock and Wouler Gelade; published by Microinsurance Innovation Facility,” https://www.microcapital.org/microfinance-paper-wrap-up-why-people-do-not-buy-microinsurance-and-what-can-we-do-about-it-by-michal-matul-aparna-dalal-ombeline-de-bock-and-wouler-gelade-published-by-microins/

MicroCapital. February 23, 2013, “MICROFINANCE PAPER WRAP-UP: ‘Microinsurance Product Development for Microinsurance Providers;’ by Michael J. McCord; published by Microfinance Centre, Microinsurance Centre, International Fund for Agricultural Development,” https://www.microcapital.org/microfinance-paper-wrap-up-microinsurance-product-development-for-microinsurance-providers-by-michael-j-mccord-published-by-microfinance-centre-microinsurance-centre-internatio/

MicroCapital Universe Profile: Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Deutsche+Gesellschaft+f%C3%BCr+Technische+Zusammenarbeit+GmbH+%28GTZ%29

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

 

Similar Posts: