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Microfinance and Asean Integration: Joselito S. Almario Presented at The Asian Insitutue of Management July 23, 2014

This document summarizes the state of microfinance and microinsurance in the Philippines. It begins by describing the landscape before microfinance became a policy focus, with an absence of financial inclusion and proliferation of subsidized government credit programs. It then outlines the basic principles of microfinance and where the sector is now. Major microfinance products are discussed as well as the poor insurance penetration among low-income groups. The document details efforts to develop microinsurance in the Philippines and compares traditional insurance with microinsurance. It analyzes the country's rankings in microfinance and potential opportunities and challenges from ASEAN integration. In closing, it argues microinsurance can help the unserved and underserved meet future unexpected financial needs as microcredit does for present needs

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Lianne Carmeli B. Fronteras
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29 views17 pages

Microfinance and Asean Integration: Joselito S. Almario Presented at The Asian Insitutue of Management July 23, 2014

This document summarizes the state of microfinance and microinsurance in the Philippines. It begins by describing the landscape before microfinance became a policy focus, with an absence of financial inclusion and proliferation of subsidized government credit programs. It then outlines the basic principles of microfinance and where the sector is now. Major microfinance products are discussed as well as the poor insurance penetration among low-income groups. The document details efforts to develop microinsurance in the Philippines and compares traditional insurance with microinsurance. It analyzes the country's rankings in microfinance and potential opportunities and challenges from ASEAN integration. In closing, it argues microinsurance can help the unserved and underserved meet future unexpected financial needs as microcredit does for present needs

Uploaded by

Lianne Carmeli B. Fronteras
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPSX, PDF, TXT or read online on Scribd
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MICROFINANCE AND

ASEAN INTEGRATION
JOSELITO S. ALMARIO
Presented at the Asian Insitutue of Management
July 23, 2014

WHERE WERE WE BEFORE


Absence

of financial
inclusion policy

Proliferation

of

subsidized
government credit
programs
Unsustainable private
financial institutions
dependent on
government cheap
funds

Lack

of access by the
poor from formal
financial services

Low outreach of
government credit
programs
Undisciplined
borrowers
Weak private sector
participation
2

PAST GOVERNMENT
INITIATIVES

MICROFINANCE BASIC PRINCIPLES


Greater

role of the private sector in the


delivery of financial services;

An

enabling policy and regulatory


environment;

Market-oriented

financial and credit

policies; and
Non-participation

of government line
agencies in the implementation of credit
and guarantee programs

WHERE ARE WE NOW IN


MICROFINANCE

MAJOR FINANCIAL PRODUCTS


OF MICROFINANCE

POOR INSURANCE
PENETRATION IN LOW
INCOME SECTOR

WHAT WERE DONE IN MICROINSURANCE


Microinsurance Defined
Microinsurance Providers
Identified
Branding and Slogan
Conceived
Formalization Process
Clarified
Microinsurance
Agents/Brokers Created
(CBOs included)
Prototype Product Developed
Contracts Simplified
Performance Standards
Formulated
Reporting Standards
Established
MBA Chart of Accounts
Revised
Trainings on MI Advocacy
and Seminars

2010

2011

2012

2013

July
2014

TRADITIONAL INSURANCE
VS. MICROINSURANCE
Trait
Target
Market
Delivery
Channels

Traditional
Insurance
Middle to high
income sector
Sold through
individual licensed
agents or brokers

Microinsurance

Low income and


informal sector
Sold through licensed
non-traditional
agents, such as
cooperatives, NGOs,
and rural banks
Document Complex (may
Simple, easy to
ary
include medical
understand and
requireme exams or tests, etc.) minimal requirements
nts

TRADITIONAL INSURANCE
VS. MICROINSURANCE
Trait

Traditional
Insurance

Microinsurance

Mode of Fixed and regularly


Premium collected premium
payment payments (annual,
semi-annual,
quarterly, monthly)

Flexible, cash flow


based premium
payments

Policies

Few provisions and


conditions

Many provisions and


conditions

Claims
Claims may exceed 10 Claims must be
Settleme working days
settled within 10
nt
working days

35 Commercial Insurance Providers


17 Life Insurance Companies
18 Non-Life Insurance Companies
22 Mutual Benefit Associations
89 Microinsurance Products Approved
124 licensed agents (34 RBs, 90 indivs.)

20 Million Filipino Lives Covered

ARE WE AFRAID OF THE ASEAN


INTEGRATION 2015-2020?
Cross

Border Supply

Consumption
Commercial
Movement

Abroad

Presence

of Natural Persons

ECONOMIST INTELLIGENCE UNIT


STUDY ON MICROFINANCE 2013

Ranks the Philippines among 54 countries:

1st in Regulatory
Framework

4th in overall
microfinance
business
environment

8th in
Supporting
Institutional
Framework

20th in Stability
13

. . . The Philippines
being the country
with the highest
microinsurance
coverage ratio in
Asia.
The Landscape of
Microinsurance in
Asia 2013
Munich Re Foundation with the
support of GIZ

The more appropriate


question is:
Can we make use of the
ASEAN integration to
penetrate ASEAN markets
when it comes to financial
inclusion products and
services?

IF MICROCREDIT
PROVIDES THE UNSERVED
AND UNDERSERVED THEIR
PRESENT FINANCIAL
NEEDS, MICROINSURANCE
WILL PROVIDE FOR THEIR
FUTURE UNFORESEEN AND
UNEXPECTED FINANCIAL
NEEDS.

Thank you!!!

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