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Highlighting the vast untapped potential of the sector, SBP acting governor said that Pakistan is among the few countries in the world where microfinance activities have been gradually mainstreamed into the formal financial system.

Slum-dweller Krustin bin Juri lost everything when floodwaters swept through his home and shop on the banks of Jakarta’s filthy Ciliwung river two years ago. But when the next flood hits, and it will because Jakarta sees frequent floods in the rainy season, bin Juri may have a modicum of protection thanks to a low-cost insurance policy that he purchased this month. He is among millions of the world’s poor who are covered for natural disasters by cheap insurance, or microinsurance, as commercial firms recognise that insuring the poor is not just good public relations but also profitable.

Once upon a time, Sumitra used to roam the streets of the Indian city of Ahmedabad, collecting discarded caps which could be recycled and sold back to manufacturers such as Coca-Cola.

The World Bank estimates that half of the world lives on $2.50 a day or less. As global leaders scramble to stabilize the financial systems of the world's largest economies, they have an unparalleled opportunity to include the world's poorest households. Meaningful and inclusive reform expands financial access to those who need it most.

Microinsurance has been recognized worldwide as a potential instrument for promoting safety nets to extend financial inclusion to poor households. However, contrary to general expectations, micro insurance delivery has not achieved substantial scale as compared to the micro finance movement. Insurers in India operate in a regulatory environment that requires them to achieve priority sector targets and meet rural and social sector obligations. Though, there clearly exists an untapped and largely unexplored market for insurance in India, the ability of risk carriers to operate microinsurance schemes viably is constrained by the lack of reliable data and the absence of alternate means of risk assessment. Adequate emphasis on research and development of suitable risk management systems is critical to make markets work for the poor.

Sean Moroney, chairman of AITEC Africa, whose core business since 1987 has been focussed on ICT publishing, event management, professional development and training in Africa, spoke to Hilary Okeke on the forthcoming AITEC Banking and Payment Technologies Conference and other issues.

Sound policies and regulations for microinsurance in Nigeria will encourage innovation, investment, sustainability and growth in the insurance sector, while protecting consumers and the soundness of institutions. The overall objective, according to the author, is to provide value-for-money products on a massive scale to the low-income population.

Insurers should think small to tap into one of their biggest opportunities for growth: serving poor people. The financial services industry is facing unprecedented challenges worldwide due to excessive risk-taking. Complicated investment vehicles, insufficient transparency and excessive swapping of credit default risk have had a severe and pervasive impact on confidence. The world's most advanced markets for financial services are reeling in uncertainty.

Welcome to this blog about Microfinance, Innovations and Sustainable Development