International Development written question – answered at on 23 March 2007.
To ask the Secretary of State for International Development what (a) funding and (b) other resources his Department (i) has committed to micro-insurance schemes in the developing world and (ii) plans to commit in each of the next three financial years.
The UK's 2006 White Paper on International Development commits DFID to tackling barriers to access to markets and financial services, and supporting microfinance initiatives in partnership with banks and regulators.
DFID's financial sector programmes aim to build stronger and more inclusive financial sectors, which benefit the poor. "Microfinance" incorporates a full range of financial products, which includes micro-insurance as well as savings, credit and remittances.
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Examples of microfinance programmes supported by DFID include:
In India, Megatop received a grant of £850,000 via the Financial Services Deepening Trust, to support them in offering a range of microinsurance products and pension policies to farmers in 9,000 villages in Andhra and Madhya Pradesh using a network of village internet portals to lower costs and expand access.
Since the last review of commitments in October, DFID has approved a £32.8 million seven-year PROSPER programme in Bangladesh, which will support delivery of innovative financial services to the very poor, small businesses and farmers. Around 22 per cent. of these resources will go to a Learning and Innovation Fund which will support projects to test innovative financial services, including microinsurance.
As well as direct support to programmes, DFID also works in coordination with other donors and specialist agencies:
DFID provides core funding to the Consultative Group to Assist the Poor (CGAP), a consortium of 33 public and private development agencies working together to expand access to financial services for the poor. The CGAP working group on microinsurance, in conjunction with the International Labour Organisation, has recently published a Microinsurance Compendium for insurance practitioners and policy makers in developing countries.
DFID is a leading supporter of FIRST, the Financial Sector Reform and Strengthening Initiative, a multi-donor trust which provides advice to developing countries on how to develop their financial sectors. In Mongolia FIRST has worked with the insurance industry, the government and the World Bank to develop a novel livestock insurance scheme that will provide microinsurance to cattle herders at affordable prices.
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