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Trends of Microinsurance in India

Posted on by MSC

Microfinance in India has largely been driven by credit products of microfinance institutions (MFIs), and microinsurance has remained a secondary choice for financial inclusion. However, recently, many important developments have taken place in the Indian microinsurance sector. Though India has experimented a lot with microinsurance, the sector is still driven by supply-led interventions.

Moreover, the insurance providers, still, seek government subsidies and donor funding in order to achieve financial viability in preference to designing market-led, sustainable schemes. A strategic perspective towards microinsurance together with innovations in technology and assessment of client demand, probably holds the key to the future of microinsurance in India.

Product features of Micro and Small Enterprises Lending (2/2)

Posted on by Parul Tandon

This Briefing Note discusses the 7 of the 8Ps of Marketing – Price, Positioning, Process, Promotion, People, Place and Physical evidence.

The Note describes that the total cost of Individual Lending (IL) product not only includes interest and fees paid by the client but also a host of other costs such as foregone wages, travel costs and time amongst others. Therefore the MFIs must strive to keep the indirect cost to minimum through efficient processes. The Note discusses the importance of MFIs positioning in the market and suggests that the MFIs should put best effort to occupy a distinct competitive position in the customer’s mind. The Note suggests that the MFIs should prepare a comprehensive procedure manuals detailing the “who, what, when, where, why and how” of all processes with adequate internal control provisions to mitigate risks. Further, these manuals should be regularly updated and readily available for staff’s use. The Note comments on the requirement of staff incentive schemes to mitigate the fraud risk.

The Note further explains in detail the importance of properly managed/maintained branches, clear and concise communication and 100% door step service through detailed sections on three other important Ps of marketing which are Physical evidence, Promotion and Place.

Product Features of Micro and Small Enterprises Lending (1/2)

Posted on by Parul Tandon

Many MFI’s have started to introduce individual loan as one of their product offerings. They see individual loans as a good business opportunity and as an effective mechanism to help clients in business activities. Market research is a pre-requisite for launching a successful new product offering. MFIs must carefully dwell upon important product features of individual loan before rolling out the product.

This note attempts to highlight the key product features which an MFI must focus on, before offering individual loan product to the clients are as follows:
– loan size
– loan term
– repayment frequency
– pre-closure rules

Who Says You Can’t Do Micro Savings in India? Part 4: Practical Next Steps

Posted on by MSC

This note explores that majority of the savings product currently available to the poor are mainly those that have been either in existence for quite some time now or have been replicated from somewhere. These products fail to understand the customised needs of the poor clients and thus lack adaptability.

Several researches including “”Portfolios of the poor”” have shown that poor people do and want to save for life cycle events like marriages illness etc. Poor’s dependence on community based services exposes the fact that the current offerings do have certain hurdles for the poor to access services from the current service providers.

The note discusses a few important points that financial service providers should focus on while designing and rolling out a savings product for clients.

Who Says You Can’t Do Micro Savings in India? Part 3: So Where to Go from Here?

Posted on by MSC

This note explores that majority of the savings product currently available to the poor are mainly those that have been either in existence for quite some time now or have been replicated from somewhere. These products fail to understand the customised needs of the poor clients and thus lack adaptability.

Several researches including “”Portfolios of the poor”” have shown that poor people do and want to save for life cycle events like marriages illness etc. Poor’s dependence on community based services exposes the fact that the current offerings do have certain hurdles for the poor to access services from the current service providers.

The note discusses a few important points that financial service providers should focus on while designing and rolling out a savings product for clients.

Managing Micro and Small Enterprises Lending

Posted on by Parul Tandon

The note discusses the prevalence of group lending methodology which has been in existence for quite some time now. Majority of the MFIs use this methodology for their operations and are well versed with its nuances. Individual Lending (IL) has emerged out as a new product that many MFIs have started to offer to their clients.

Individual lending being a completely different product requires different set of skills all together. It has its own customised lending processes and operations. This note attempts to substantiate the various important issues of the lending cycle for individual loan.