Micro Enterprise, Development Review Vol.9 No.1
By SDS/MSM (07/06, En, Es) See also Microenterprise
The New Capital Accord (known as Basel II) seeks to promote best practices in risk management among financial intermediaries, more effective regulation and supervision, and greater market discipline. Although no country in Latin America and the Caribbean is required to comply with Basel II, several countries in the region have already drawn up plans for its gradual implementation. In the first article, Enrique Navarrete (Scalar Consulting) y Sergio Navajas (Banco Interamericano de Desarrollo) analyze just how appropriate Basel II is for microfinance portfolios in the region, and what the results of their possible application would be.
In the second article, Jim Roth (Microinsurance Centre) discusses the characteristics of a model for the provision of insurance for low-income populations. The partner-agent model. In this model, the insurer relies on an intermediary like a microfinance institution (MFI) to act as its agents. The MFI sells and services the policies. It collects premiums and hands them on to the insurer and in many cases pays the benefits directly. In compensation the agent earns a commission. The insurer takes the risk and earns a profit or faces a loss. This article presents examples of the application of this model in Latin America and the Caribbean as well as the obstacles than could be removed with the support of donors.
Last updated: 05/08/07
