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Insurance is a largely invisible yet ubiquitous part of our economies. Our health, movements, purchases, homes, and even lives are usually covered by insurance. Without insurance, the unpredictability of the future would be too great and it would be difficult to take risks and innovate. In other words, insurance typically allows people to break the psychological and financial barriers which normally prevent them from engaging in potentially riskier activities thus forgoing greater reward and innovation. Insurance has contributed to macroeconomic development through economic growth, stabilization, distribution, and innovation.

Index-based insurance is an innovative financial service that can help smallholder farmers manage some of the risks related to weather conditions. On one hand, the increasing availability of this financial service offers a big opportunity to both farmers and providers. On the other hand, the complexity of this risk management tool can lead to poorly-understood index insurance products that may do more harm than good. This Briefing Note has been produced as part of the Global Action Network to advance agriculture insurance, a partnership between the Facility, USAID and the BASIS Assets and Market Access Innovation Lab/I4 Index Insurance Innovation Initiative at the University of California Davis.

With 1.5 billion people worldwide getting access to financial services through a post office, postal networks are powerful tools to advance financial inclusion. Posts possess or can develop characteristics such as client understanding, product diversification, national outreach, rural advantage, and trust with clients that have the potential to transform postal networks into well-suited providers of insurance. Insurance is a relatively easy way for posts to diversify their sources of revenue.

Small businesses are vital to economic development. However, they are exposed to a wide range of risks, ranging from theft of assets to illness of a key worker or a natural disaster. Furthermore, they struggle more than larger businesses to cope with these risks. Insurance represents an important tool to help them better manage such risks.

The report outlines the data around INGOs’ current approaches to making investments, receiving investments, providing technical assistance, and building the impact investing ecosystem. It then delves into some of the most important issues for INGOs, including internal capacity, organizational culture, measurement, and partnerships. Each section is complemented by short sidebars that bring these topics into greater clarity through specific examples of how INGOs are engaging. These examples are then expanded into short profiles.

The analysis covers evidence on women-owned enterprises and how their productivity can be enhanced, with particular focus on SMEs. It closes with recommendations on how to empower women-owned businesses.

This short briefing, the eleventh in a series that demonstrates how specific products and services can expand the reach of financing for smallholder farmers, explores how innovative lenders are using new data sources and analytics to assess the creditworthiness of borrowers.