Mesofinance Media - News , Research

The potential for agricultural insurance in the Philippines \ Niclas Benni \ UN Food and Agriculture Organization

Mon, 12 Feb 2024 10:09:43 -0500

This study evaluates the feasibility and potential benefits of introducing agricultural insurance in the Philippines’ Bangsamoro Autonomous Region in Muslim Mindanao. The intent is to enhance the resilience of small-scale farmers in BARMM against extreme natural events such as floods, droughts and hurricanes.

Mr Benni refers to prior research indicating that agricultural productivity in the region is not meeting its potential due to “limited access to credit and agricultural insurance, low farm mechanization and inadequate post-harvest facilities, inadequate irrigation, scant support to research and development, unstable extension service, and incomplete agrarian reform program implementation.”

When the idea of purchasing insurance was introduced to farmers in BARMM, some were receptive to the idea while others were not. The latter group may benefit from education on the potential benefits of insurance.

The Philippine Crop Insurance Company is a government entity that protects farmers against losses to crops - based on weather conditions or actual yields - as well as damage toassets such as harvesting and processing equipment. However, PCIC enrollments have been low in BARMM due to conflict in the region and lack of collaboration with local government units.

To improve farmers’ access to insurance, Mr Benni suggests: (1) reviewing the insurance projects of the World Bank and the Asian Development Bank that are ongoing elsewhere in the Philippines to see if they can be replicated in BARMM; (2) increasing outreach by PCIC in the region; and (3) piloting a index insurance product in BARMM that complies with Islamic principles.

This is a summary of a paper published by the UN Food and Agriculture Organization and written by Niclas Benni.

Summary by: Courtney Huang

A Technical Guide to Unlock Agent Networks at the Last Mile \ Achmad Budiman et al \ CGAP

Mon, 05 Feb 2024 10:44:17 -0500

Mr Budiman et al present several examples of successful implementations of rural cash-in / cash-out agent networks, which enable customers to exchange cash for electronic money and vice versa. According to the Global Findex, 1.4 billion adults are financially excluded, and 31 percent of this group lives far from any financial institutions. Rural CICO agent networks are one way to address this gap in access to financial services.

Bancolombia invested in rural CICO agents in Colombia, allowing these private ventures to reach a significant number of rural customers. Without such an investor, rural enterprises may find the up-front cost of becoming agents too high. Government subsidies can help, as can technical assistance from domestic and international investors.

To expand rural CICO agent networks, the authors suggest that providers of digital financial services: (1) carry out a comprehensive evaluation of the rural market in question; (2) consider outsourcing agent training to a third party; (3) in addition to training rural agents, create a salesforce to build rural demand; and (4) focus on engaging women as agents.

This is a summary of a paper published by CGAP that was written by Achmad Budiman, Nadine Chehade, William Cook, Patrick Meagher, Alice Negre, Anand Raman, Corinne Riquet, Paul Reynolds.

Summary by: Pranav Agarwal

Financial Inclusion for Persons with Disabilities \ Adriana Carolina Armos Cuesta et al \ Alliance for Financial Inclusion

Mon, 29 Jan 2024 14:20:41 -0500

Adriana Carolina Armos Cuesta and her colleagues analyzed the National Financial Inclusion Strategies of 16 countries. Although 1 billion people in the world live with disabilities, this segment comprises less than 0.5 percent of the customers of global microfinance institutions. Approximately 80 percent of those who live in low-income countries and have disabilities do participate in the informal sector through self-employment. However, the World Bank estimates that the remaining barriers to the economic inclusion of this group reduce global GDP by 5% to 7%.

The obstacles preventing people with disabilities from accessing formal financial services include: (1) lack of education; (2) discrimination; (3) inadequate training of staff of financial services providers; (4) regulatory frameworks that fail to incentivize FSPs to design services for people with disabilities or to foster greater “access [to] and usage of adaptive financial technologies;” (5) lack of access to mobile phones - particularly smartphones; and (6) shortage of data to assess the needs of people with disabilities and to create and monitor programs and policies to address those needs.

Among the actions noted from the National Financial Inclusion Strategies are: (1) expansion of Kenya’s National Development Fund for Persons with Disabilities; (2) lowered tills and access ramps in financial institutions and social welfare offices in Uganda; (3) documents offered in braille, sign language translation and ramp installations in bank branches as well as job quotas for people with disabilities in Pakistan; and (4) tactile features added to paper currency in the Philippines.

In closing, the authors suggest three measures: (1) increasing access to assistive financial technologies; (2) gathering data classified by type of disability, age and gender to improve policies and product development; and (3) developing government plans targeting the three dimensions of financial services: access, usage and quality. As part of this process, the authors emphasize the importance of engaging people with disabilities - and representative organizations - in all phases of the strategies: design, execution and monitoring.

This is a summary of a paper that the Alliance for Financial Inclusion (AFI) published in November 2023. The authors are Adriana Carolina Armos Cuesta, Isabela Pradere da Silva Ramos, Daniel Ricardo Meza Rodriguez, Diana Schvarztein and Robin Newnham.

Summary by: Renata Samadova