Testing and scaling microinsurance schemes
In a nutshell
|Sustainable Development Goal||Good Health and Well-being|
Today, still 1.7 billion people have no access to basic financial products and services, more than half of them women and a disproportionate share of them poor. At the same time, the financing needs of about 40% of the developing world’s 162 million micro-, small- and medium-sized enterprises in developing countries – engines of economic development – go unmet.
For low-income populations, a lack of access to and use of financial products, channels and services is a crucial barrier to building resilience. Well-designed financial products help them prepare for risk, reduce risk, increase business investment in spite of risk and bounce back from shocks when they occur. Financial inclusion is thus a key lever for reducing poverty and stimulating broad-based economic growth.
The Swiss Capacity Building Facility (SCBF) brings the private and public sectors together to sustainably promote financial inclusion in low- and low-middle-income countries. This public-private partnership funds technical assistance (TA) for financial service providers to develop, pilot, assess the effectiveness of, replicate and scale innovative, affordable client-centric financial products, channels and services. Those products and services include savings accounts, loans, insurance, digital financial services and financial education.
SCBF supports financial institutions that have a proven social or financial inclusion mission and require tailor-made support to overcome specific constraints on their capacity to develop financial products for unbanked and underbanked end clients. Participating financial institutions receive SCBF funding not directly but rather through TA providers.
SCBF has a strong track record. From its inception in 2011 to the end of 2019, it provided a total of USD 12million to fund 129 projects and three outcome studies in 42 countries.
Goals and Expected Impact
With this grant, the Swiss Re Foundation will support seven insurance projects related to health, agriculture or recovery from catastrophic events as well as two insurance-related outcome studies.
Targeting low-income households, smallholder farmers and small- and medium-sized enterprises, the projects supported by SCBF aim to increase or improve:
Protection of a basic standard of living. By using savings and insurance products, clients build their resilience to the negative effects of adverse weather, catastrophes, death or illness of the family breadwinner and armed conflict.
Employment, income and asset accrual. Suitable loan, leasing and insurance products allow clients to invest in their productive activities, increase their income through better access to markets, create employment opportunities and build their assets.
Access to essential services. Payment services and channels ease clients’ access to electricity, clean water, sanitation, education and healthcare on affordable, predictable terms.