Publication database

An increasing number of poor households are gaining access to financing for physical assets ranging from smartphones to solar panels. However, even as poor people increase their borrowing for these assets, their impact on people’s livelihoods - and how debt affects the benefits of asset ownership - remains poorly understood. CGAP has undertaken a comprehensive review of the available evidence to understand (i) how asset ownership can lead to improvements in well-being for poor households and (ii) whether obtaining an asset through a loan or lease as opposed to a transfer, grant, or outright purchase affects the benefits associated with ownership.

Angkor Mikroheranhvatho Kampuchea (AMK) participated in the ILO Microfinance for Decent Work (MF4DW) action research from 2008-2012. As part of this global experimental research, AMK introduced a financial education programme in two rural branches. The programme aimed to address challenges that clients faced in regard to the risk management strategies they use and their levels of indebtedness. The impact of the financial education programme on clients’ financial attitude and behaviour, risk management strategies, asset building, over-indebtedness and multiple borrowing, and vulnerability, was measured employing a difference-in-difference methodology. The econometric analysis is based on a balanced three-wave panel data set with target and control groups. It shows that AMK’s financial education programme had the strongest impact on the repayment behaviour of clients with a significant reduction of 3.4 per cent in late repayments. The innovation also had significant and positive impact on asset building outcome variables such as insurance take-up with a 10 per cent increase. The programme positively influenced financial attitude as shown by a significant decrease in client belief that it is impossible to save, clients’ association of savings and security increasing by 1 per cent as well as changing attitudes towards borrowing. However, the analysis also shows insignificant and/or unexpected results for other outcome variables, which may be due to some issues with the experimental design of the research and the survey instrument. It is therefore possible that the innovation may have had a stronger impact than actually measured and reported in this document.

The evaluation showed that TYM’s integrated risk management and microinsurance client training had the strongest effect on the financial attitudes of clients, especially on planning attitudes and on attitudes related to savings. The percentage of clients in the target compared to the control group that agreed to be able to put money aside for emergency expenses increased by a remarkable 22 per cent and the attitude towards planning household budgets for longer than a year improved by 17 per cent. Impact on client risk management behaviour was also strong by contributing to improving a number of situations that clients face. For example, clients who had access to the training less often ran out of money before making income than clients who did not have access to the training (decrease of 13 per cent). Interestingly, the observed change in financial attitudes regarding savings and planning already reflected in changed financial behaviour related to the same as we saw a 17 per cent increase in the ability to set aside money for emergencies as well as a 13 percent increase in clients with longer planning horizons. The analysis also showed some insignificant and some unexpected results for other outcome variables, which may be due to some issues with the experimental design of the research and the survey instrument. It is therefore possible that the innovation may have had a stronger impact than actually measured.

National Rural Support Programme (NRSP) of Pakistan participated in the ILO’s Microfinance for Decent Work (MF4DW) action research programme from 2008-2012. As part of this experimental research, NRSP launched and tested an extended microinsurance product (health and accidental death) covering extra-nuclear family members of the same household in order to see if there was a positive impact on the reduction of child labour among 2,097 client households, using a target versus control group methodology.

The paper reviews the pilot experiments conducted from 2011 onwards in eight districts across six states to test the provision of outpatient (OP) benefits under RSBY, India’s Social Health Insurance Scheme for low income populations. Administrative data on enrolment, empanelment of care providers and outpatient claims was analysed for the review. The paper also discusses the status of primary care in India and outpatient care provision in similar schemes in other developing nations (Vietnam, Ghana, Indonesia, Philippines and Thailand).

Rashtriya Swasthya Bima Yojna (RSBY) is a programme that needs no introduction. Launched in 2008 to provide secondary care to below poverty line (BPL) households, the scheme has expanded rapidly. Today, it covers nearly 38 million households and is present in 512 districts (out of a total 640) across all 28 states and union territories. This paper analyses key performance indicators (KPIs) for the programme, so as to identify ways of improving the scheme’s performance. 

The study focuses on three KPIs:

Enrolment ratio, measuring the percentage of eligible households enrolled, so as to estimate outreach;
Hospitalization ratio, to estimate utilisation;
Claims ratio, one of the key metrics that determines whether the scheme is profitable for the insurers.

The objective of this study was to conduct a community-based retrospective analysis of primary, secondary and tertiary care utilization over a 12 month period by 5000 urban slum dwellers in the context of an integrated health insurance plan (outpatient and inpatient) that was introduced by Naya Jeevan into Sultanabad (an urban slum in Karachi) during the 2013 calendar year.

Research paper #40 evaluates the financial viability of CARE Foundation’s rural primary-health-care delivery model, which includes an outpatient insurance product. The model is aimed at providing access to affordable primary health care in rural areas. The paper assessed the value proposition of the programme to clients and reviewed the performance of the outpatient insurance product, taking into account the contextual factors affecting the product and the model. Since technology plays an important role and is considered key to contributing greater efficiency, the programme’s use of technology and the impact of this are analysed in detail.  

Microfinance institutions have started to bundle their basic loans with other financial services, such as health insurance. Using a randomized control trial in Karnataka, India, Research Paper #37 evaluated the impact on loan renewal from mandating the purchase of actuarially-fair health insurance covering hospitalization and maternity expenses. Bundling loans with insurance led to a 16 percentage point (23%) increase in drop-out from microfinance, as many clients preferred to give up microfinance than pay higher interest rates and receive insurance. There was no adverse selection in insurance enrollment, but only because there was a total absence of demand for health insurance. Further, the decrease in microfinance loan renewal reduced clients' access to credit and had negative impacts on their businesses.

Despite the rapid growth of health microinsurance (HMI) programs, there is little empirical evidence of their distributional consequences. This paper suggests that the concern of HMI leading to regressive transfers from poor to relatively wealthier households is less important than expected based on an imbalanced randomized control trial with a community based HMI programme in rural Maharashtra in India. Below the Poverty Line (BPL) households consume only 66 per cent of non-BPL households’ annual health care expenditures, suggesting that poorer households subsidize wealthier households. Yet, HMI differentially increases BPL households’ health care expenditure by almost USD 3 per month of coverage. Poorer households are also more sensitive to cost reductions in health care and gains in health care are concentrated among them. These findings suggest that HMI narrows the gap in health care consumption among the insured.