MFI Information:

Financiera Confianza

Decent Work Area:

Vulnerability, risk management and overindebtedness

Innovation:

Financiera Confianza implemented a combination of financial and non-financial services. The innovation consisted of risk management training for clients as well as a voluntary multi-risk insurance product both of which were to help clients protect against unforeseen expenses.

Results:

Some positive impact on multiple borrowing/overindebtedness

• 28% lower outstanding loan balances, and number of other financial service providers used

Positive income effect of 450-500 Soles (170-190 USD)

No impact of financial education on insurance uptake (not significant)

Counter-intuitive results:

• Significant negative impact vulnerability as fewer clients can meet unexpected expenses (36%) and cover monthly costs (21%)
• Increase of late payments by 12% (over-indebtdness)
• Significant negative impact on attitude towards savings for emergencies (25%)

Relevant links:

• 1 Page poster with summary of MF4DW intervention and MFI profile