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Roth, James and Vijay Athreye, 2005, "Tata-AIG Life Insurance Company Ltd., India" CGAP Working Group on Microinsurance, Good and Bad Practices, Case Study No. 14, September. Sa-Dhan and SMCS, 2006, "Regional Consultation on Facilitating Access to Micro-Insurance: Issues and Challenges", January 12 and 13, Bhubaneshwar. SEWA and FWWB 2003, "Microinsurance for the Poor:Strengthening Services and Addressing Policy Issues" Proceedings of the National Workshop held at Vigyan Bhavan, New Delhi, 15-16 September, 2003. 94
B. Money Transfer Services If microinsurance is a young albeit rapidly growing microfinancial service in India, domestic money transfer services are still in their infancy, in India as elsewhere. However they would appear to have tremendous scope. The focus of the growing attention on money transfer services as a potential opportunity for MFIs has been on cross-border remittances. 1 However, in many large countries the number of domestic migrants far outnumbers those who migrate abroad. 2 In India, huge flows of migrants criss-cross the country in search of a better life for themselves and their families, who mostly stay behind in their villages. Internal labour migration has a long history in India, and is probably increasing with differential rates of growth in different states and pockets within states. Except for short distance or short term migrants, migrants need a fast, low cost, convenient, safe, and widely accessible money transfer service to send their earnings back to their families and dependents for vital consumption needs, including lean season support and sudden medical emergencies, as well as for important investment requirements. At present options available to a poor migrant are limited. The postal money order charge of 5 percent means parting with a full day's wages about once a month to send one's meagre savings home. This is unacceptable in this day of modern electronic communications. A second option is bank drafts, which are cheaper, but most recipients do not have access to the banks to encash drafts easily. A third option is sending money in cash through returning friends and relatives, but this means waiting till someone who can be trusted enough is returning home, and even then there is the risk of theft. The fourth option is through informal money transmitters, who are fast, and provide good service in those urban areas in which there is enough competition between them, as in Surat (see Box 5.4) One requirement for an MFI to meet the need for a money transfer or remittance service is a critical minimum number of migrants in the place of destination from a particular place of origin, which will almost invariably be a rural area. At least a dozen larger cities in India are likely to meet this condition, each of them for several groups of migrants from different parts of the country. Like Adhikar, described in Box 5.4, an MFI from the originating area can establish a base in the city or area of migration destination, or it can tie up with an existing MFI or bank or money transfer company there. The same arrangements are possible in reverse. 3 The second requirement for an MFI to provide money transfer services viably is that it should be willing to charge a cost-recovering service charge The service charge is likely to be higher than that charged by the banks which enjoy greater economies of scale and scope. However, until the banks become a real alternative to most remitters there is appears to be enough headroom for MFIs to charge a service fee that achieves viability. 4 95
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Microfinance in India A State of th
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List of Tables Page No Table 2.1 Gr
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Preface and Acknowledgements This r
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Abbreviations ABC ADB BC BF CAR CAG
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CHAPTER 1 Overview and Summary of M
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Overview and Summary of Main Recomm
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1 1a 1b 2 2a 2b 2c 3 3a 3b 3c 4 4a
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The Light and Shades Study A major
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highest proportion of weak records
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their profitability after accountin
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allow the programme to grow organic
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1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8
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Endnotes 1 It is very hard to compa
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as cash with the groups, the true r
Page 46 and 47: linkages", 11 percent 3rd, and 5 pe
Page 48 and 49: References APMAS (AP Mahila Abhivru
Page 51 and 52: CHAPTER 3 Progress Under the MFI Mo
Page 53 and 54: Progress Under the MFI Model is fun
Page 55 and 56: Table 3.4 Comparative performance i
Page 57 and 58: Progress Under the MFI Model on lit
Page 59 and 60: Progress Under the MFI Model 4 Howe
Page 61: Progress Under the MFI Model Refere
Page 64 and 65: MFIs, and the need for MFIs to plou
Page 66 and 67: size had actually come down during
Page 68 and 69: The point at which peer group press
Page 70 and 71: The lack of contact and communicati
Page 72 and 73: Box 4.1 Continued 4. MFIs will coll
Page 74 and 75: Endnotes 1 There will be many disag
Page 76 and 77: 19 The base suicide rate in AP is 1
Page 78 and 79: References APMAS, 2005, "A Report o
Page 80 and 81: (such as cattle and houses), and co
Page 82 and 83: The advantage of the provider model
Page 84 and 85: Some lessons learnt from experience
Page 86 and 87: Box 5.2 VimoSEWA: Synergies between
Page 88 and 89: 86 Table 5.1 Main Feature of Health
Page 90 and 91: Endnotes 1 While the microinsurance
Page 92 and 93: 16 A little less than a fifth of th
Page 94 and 95: 29 The rationale for transfer progr
Page 98 and 99: Issues and priorities for action re
Page 100 and 101: Endnotes 1 See for instance CGAP (2
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Page 104 and 105: such as Chaitanya who soon became s
Page 106 and 107: money to support operational expens
Page 108 and 109: finance, and the microfinancial ski
Page 110 and 111: Box 6.1 Continued in experts and to
Page 112 and 113: Endnotes 1 In a sense it always was
Page 114 and 115: 16 Examples are Margdarshak in Luck
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Page 118 and 119: Table 7:1 Commercial bank exposure
Page 120 and 121: The main constraints to the expansi
Page 122 and 123: further review, RBI has modified th
Page 124 and 125: 9 Thus ICICI has sold some of its b
Page 126 and 127: B. Equity Investments by the Ventur
Page 128 and 129: Figure : The Bellwether triangle Lo
Page 130 and 131: Despite the weaknesses the public s
Page 132 and 133: Box 7.1 Continued foreign sources o
Page 134 and 135: Endnotes 1 At this point they will
Page 136 and 137: References ACCION, 2003, "The Servi
Page 138 and 139: SIDBI Foundation for Micro Credit (
Page 140 and 141: categories, depending on the amount
Page 142 and 143: The distribution of total disbursem
Page 144 and 145: Endnotes 1 It should be noted that
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B. Donor Participation in Indian Mi
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this has dropped to 8% on the curre
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and poor populations. More directly
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and expansion of available retailer
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11 SDC through various programs for
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1.1 Impact evaluation of Spandana's
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in the loan tenure of 24 months. Th
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There are two main motivations of a
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compensation structures used by Ind
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Endnotes 1 By Annie Duflo, Anvesha
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29 The main components of direct tr
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