2.2.10. Broker Bundled Financial Services (e.g. Crop Insurance)
“Bundled services,” also called “complementary programming,” or―in the case of savings groups―“savings groups plus,” are added services that are designed to improve the impact of microfinance interventions on a target population (Source: Microfinance with Bundled Services for Orphans and Vulnerable Children). Bundled financial services specifically may involve initiatives such as crop insurance, financial literacy education, or mobile banking enrollment.
- Ability to resolve bankruptcies in a timely manner
- Appropriate capital to meet borrower needs
- Ease / cost of collecting payments
- Exchange rate risk
- Interest rate risk
- Potential for higher inflation
- Unpredictable fiscal policy
- Off-take risks associated with target sector/region
- Production costs associated with target sector/region
- Rate of return on lending in target sector/region
MUST HAVE’S, CRITICAL POINTS, OR QUESTIONS TO CONSIDER
USAID and partner organization designed bundled services to improve the impact of microfinance interventions on the target population of orphans and vulnerable children.These complementary services are critical to boosting the impact of and/or adding value to financial interventions for orphans and vulnerable children receiving financial services.
Savings interventions for orphans and vulnerable children incorporate bundled services, such as the following, sometimes separately and sometimes in combination: Financial education, school-based and formal education linkages, health and protection topics, life skills training (with a particular focus on HIV and violence prevention), mentoring, enterprise development and skills training, and linkages to formal finance.
Impact of these initiatives vary based upon which initiatives were chosen for a particular individual or group. Broadly speaking, each initiative enhanced the target population’s education and awareness of financial literacy, health and safety, and employment opportunities.