Delhi & Different Microinsurance Model Philosophies

Delhi and India
Today was my last day in India before I travel to Bangladesh for my Grameen Bank internship. Traveling around India provided a great perspective on the varying levels of economic development in the different regions of the country. India is the "I" in the “BRIC” emerging market countries but some regions and villages of India would be hard to label as an emerging market.


In many parts of Delhi one can feel isolated from the way the rest of the city lives. With the government buildings, embassies, and wide clean streets of New Delhi you can almost be in Washington DC. Old Delhi is more like other cities in India with narrow streets and lively activity.

The Micro Insurance Academy
Today in Delhi, I had the opportunity to visit the Micro Insurance Academy. The Micro Insurance Academy advises communities in developing health microinsurance programs. The Micro Insurance Academy takes a different approach than most other health microinsurance consultants.

Most health microinsurance programs are designed by an outside organization, perhaps a commercial insurer or MFI, that decides what the premiums, coverages, and claims process are. The organization, not the community, designs the health microinsurance program. This can be thought of as a top-down approach. The organization is deciding what they think is the fit and need for the community where they are providing the health microinsurance. The organization administers the premium collection and claims reimbursement process.

On the other hand, the Micro Insurance Academy takes a bottom-up approach to designing health microinsurance programs. The Micro Insurance Academy will provide advice to the community to the extent the community asks for it but focuses on empowering the community to design their own health microinsurance program. The though is that who knows better how much medical treatment costs, what are the most common ailments, where the nearest clinics and hospitals are. In addition, the community self-administers the program. For example, there is a Claims committee that community members serve on.

Top-Down or Bottom-Up Designed Health Microinsurance Programs?

Tough question.

The argument for top-down health microinsurance programs is that they are more quickly scalable with ease of replicating in other communities. The argument against top-down health microinsurance programs is that the product is not appropriately designed for the community so if you are rapidly scaling up a faulty product, then what is the point.

The argument for bottom-up health microinsurance programs is they are more effective in delivering appropriate and affordable medical services to the community. The argument against bottom-up health microinsurance programs is that they take much longer to implement (about one year from the initial consultation with the community to when the program is up and running) and therefore will take more time to scale up to more communities.

I am still undecided on which approach is the best but the Micro Insurance Academy sure did a good job at almost getting my vote. What do you think?

Mumbai and Dharavi

Visiting Mumbai was the beginning of my exploration of economic development and microfinance on the Indian subcontinent.
Mumbai is the home of Bollywood and the financial capital of India. While plenty of India’s wealth is concentrated in Mumbai, Mumbai is a city of contrasts with the majority of the city’s population living in slums.

I visited Dharavi, the largest slum in Mumbai and said to be largest slum in Asia with over 1 million residents. The infrastructure of Dharavi was much less advanced than the favelas I have visited in Rio De Janeiro, but Dharavi's infrastructure and businesses are definitely more advanced than the upper class residents of Mumbai would ever believe. Dharavi is buzzing with economic activity. From plastic recycling operations and soap factories to leather tanning, there are both large-scale businesses and individual micro-entreprises throughout Dharavi.


I had difficulty finding any branch offices of MFIs but did see an advertisement for a cooperative that offers loans. Microfinance has historically been mostly a rural-focused endeavor. Group lending, which Grameen Bank’s original model was founded upon, is often the model for rural micro-lending. As a result of the difference in community and culture of a city vs. rural village, urban MFIs usually focus on individual lending. There are MFIs like Swaadhar FinAccess in Mumbai or SafeSave in Dhaka, Bangladesh that focus on urban areas only.

Introduction and onward to Bangladesh

I am an MBA student at the NYU Stern School of Business and decided to pursue an internship in microfinance to experience micro-lending and microinsurance firsthand. My main interests in microfinance are increasing access to capital markets for MFIs and the financial sustainability of microinsurance programs. Last summer, I interned for the UN Capital Development Fund in New York helping develop a microinsurance initiative and working on a remittances project. This past school year, I worked on the NYU Microfinance Initiative to organize events such as panel discussions on the role of capital markets and the role of technology in microfinance.

After working in microfinance at the international development agency headquarters level, I have been eager to experience microfinance in the field. Before interning this summer in investment banking at Bank of America in New York, I will be interning with Grameen Bank in Bangladesh. I will be traveling in India on my way to Bangladesh. I hope to gain additional perspective on different micro-lending and microinsurance programs to compare and contrast with Grameen’s model and other Bangladesh MFIs. I am looking forward to my experience and sharing my observations and experiences with you.