To be read with your 3 o’clock coffee.
Below is a round up of this week’s microfinance news. We thank our colleagues for the wonderful work they do in advancing our knowledge of best practices and innovations, as well as challenging us all to remain true to our social mission.
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Impact investors do not distinguish themselves from traditional investors by their funding vehicles, products, or the markets or sectors in which they concentrate, but rather through the motivations behind their investment…“impact first” investors … and “finance first” investors…
[According an annual survey by J.P. Morgan and GIIN, 72% of assets under management are in microfinance; impact investing also goes to SME finance, agriculture, housing, education, environment, and cross-sector projects.] While MSME-related investments represent the vast majority of impact investing exposure thus far, this is likely to change soon with the observed trend to launch funds and facilities focused on the agribusiness and fair-trade sectors.
…I traveled with women’s clothing brand Eileen Fisher to visit the people who make their scarves in India and their sweaters in Peru. One of the things the company is exploring, as part of their commitment to human rights and social consciousness, is whether workers earn enough to meet their basic needs, and if they are earning more every year, in real terms.
[They used the PPI to gather this data.] The questions are so straightforward that they can be delivered on simple mobile phones (not smartphones) directly to workers. Our mobile platform, Labor Link, surveys workers anonymously in their local language–Spanish, Hindi, or Punjabi–and does not require literacy (unlike some SMS platforms).
What did we find? Twenty-two percent of the workers in India have a sewing machine at home. But it’s not the individual questions that matter. It’s all 10 questions together that determine likelihood of poverty. Comparing India to Peru, we found that the breakdown of workers in different income brackets–high, medium, and low likelihood of poverty–was similar across countries, but with slightly more income inequality in India.
A Working Model for Health Insurance for the Poor: Learning from the early success of India’s RSBY
June 12, 2013, NextBillion.net
By Victoria Fan, Research Fellow, Center for Global Development
@CGDev & @fanvictoria
…just five years ago it was hardly imaginable that [Anil Swarup, the leader behind the Ministry of Labour’s health insurance program for the poor] and his team would start India’s health insurance program for the poor–Rashtriya Swasthya Bima Yojana (RSBY)–and grow this fledgling to be one of India’s increasingly important vehicles of social protection and health coverage.
While the evidence on RSBY is still developing, early results are encouraging: increased health care utilization and hospitalization; some indication of reduced out-of-pocket payments for health care; and a “smart card” system to identify covered patients…But RSBY also faces many formidable operational challenges ahead for which it has received considerable criticism: the challenge that all public programs in India face of educating its beneficiaries, improving targeting, and improving the quality of care.
Can Microinsurance Help Prevent Child Labor? An Impact Evaluation from Pakistan
May 2013, Microfinance Gateway
By A. Landmann & M. Frӧlich, published by Microinsurance Innovation Facility
Summary below provided by the Microfinance Gateway
This paper studies the effect of microinsurance on child labor outcomes. This was done by taking into consideration the health and accident insurance scheme by NRSP, a Pakistani MFI. NRSP bundled health insurance with their microcredit products and made it mandatory for loan clients, for their spouses, and all children of the client below 18 years…The paper ascertains lower incidence of child labor and lower child labor earnings by employing certain analytical techniques and also states that the increased insurance coverage had large effects on child labor outcomes and days missed at school. Consistent with a theoretical model developed in this paper, the effect is largely due to an ex-ante feeling of protection as opposed to a shock mitigation effect.