Blog

Microinsurance Product Types in India

Posted on by MSC

Microinsurance products in India can be classified into four different types:

Products registered as microinsurance products;
Rural and social products not registered as microinsurance products;
Community based products in partnership with insurance companies; and
Independent community based microinsurance products

Microinsurance products are registered by insurers as a response to the Microinsurance Regulation (2005). These products are mostly delivered through MFIs and are mostly are of the nature of credit-life insurance. Beyond these products, there are lot of group insurance, savings linked products and general insurance products, targeted at the low income clientele. These are filed by different insurers over the last decade and are not registered as microinsurance.

India is also home to a host of community based insurance schemes, either in partnership with insurance companies or run independently. This Note analyses the characteristics and uniqueness of these different microinsurance types with their effectiveness in delivering insurance services to the bottom of the pyramid.

Savings perceptions and preferences in India – The relative risk to the savings of the poor

Posted on by MSC

MicroSave conducted a study in three different Indian states – Rajasthan, Uttar Pradesh, and Tamil Nadu this past year to seeks answers to the following questions: How do poor people save and what works best for them among the formal, semi-formal, and informal choices available? Why do they choose one investment or savings versus another, and what atttributes are most important in this decision? What are the risks involved, and how are they different for formal, semi-formal and informal savings?

Coping with Dormancy

Posted on by MSC

“In this video Graham W. N. Wright, Group Managing Director, MicroSave, sights dormancy as the biggest problem for all mobile money implementations. With the help of case studies he explains the biggest challenges of customer adoption. Sighting examples of M-Pesa and Eko, he concludes ensuring the incentives to transact both for customers and agents are essential to deal with dormancy.

 

Way Forward: Future of Financial Services for the Poor

Posted on by MSC

RBI’s College of Agricultural Banking together with the Centre for Micro Finance, IFMR Research hosted their fifth annual conference, “Microfinance: Translating Research into Practice” on January 9-10, 2012 in Pune. Graham A.N. Wright presented a paper on Way Forward: Future of Financial Services for the Poor.

Building Business Models for Mobile Money

Posted on by Parul Tandon

To understand and assess the business of mobile banking more clearly and in more detail, this Note uses a business model framework and some of the concepts co-created by an active and vibrant community of practitioners in an online community called the “business model innovation hub”. The business model revolves around 9 building blocks, described by Osterwald et al. These are:
1. Customer Segments: An organisation serves one or several customer segments
2. Value Propositions: It seeks to solve customer problems and satisfy needs
3. Channels: Value propositions delivered to customers through communication, distribution and sales channels
4. Customer Relationships: Are established and maintained with each customer segments
5. Revenue Streams: Result from value prepositions successfully offered to clients
6. Key Resources: Assets required to offer and deliver the previously described elements
7. Key Activities: By performing a number of key activities
8. Key Partnerships: Some activities are outsourced and some
9. Cost Structure: The business model elements result in the cost structure

The Collection Methodologies in Group Lending

Posted on by MSC

Instalment collection extends for the entire duration of loan cycle (which is usually a year) and occurs at regular frequency (usually every week). This makes collections the single most critical driver of costs. This Note describes and compares the three most commonly practiced instalment collection methods in group lending. It then highlights that MFIs now have the opportunity to partner with banks as their banking correspondents (BC) and that this provides unprecedented opportunities to make instalment collection more efficient and client-responsive.

However, in conclusion it notes that whichever collection mechanism is used, MFIs will have to devise ways to ensure continuity in their interface with clients. Banking is based on trust and thus technology can never replace the person-to-person contact.