Aussie firm looks to invest in PH microfinance firms

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By Alexander Villafania

MAKATI CITY, METRO MANILA – Leapfrog Investments, an Australia-based financial management firm, is eyeing microinsurance firms in the Philippines for its next investment portfolio.

The company’s goal is to provide investment opportunities to microinsurance providers in grassroots-level communities.

During a press conference, Leapfrog Investments Partner Stephane Chatonsky said they would be looking for potential microfinance partners in the company, mostly those that provide microfinance services for life and non-life services, as well as insurance for micro- to small-and-medium scale enterprises (MSMEs).

Chatonsky said Leapfrog Investments would provide co-investment opportunities for these local partners, which would be used to expand the partners’ client base.

He said their forecast for their investments in the Philippines could reach around $25 million (approximately P1.1 billion).

Leapfrog’s investment approach is focused more on grassroots-level microinsurance that is not often tapped by large-scale insurance firms. This is because of the higher risks involved in microinsurance services where the market is targeted at those that are in the low-income bracket.

The specific type of market that Leapfrog Investment is targeting is the “middle poor” or those that are living within the US$4 to US$14 (P170 to P600per day budget.

However, Chatonsky said that countries like the Philippines have governments that are pushing for microinsurance to address the needs of the majority of its poorer population. He cites that 70 percent of the Filipino population, or about 65 million people, are low-income.

“The country also has a very small insurance coverage – only about 10 percent. This is already a huge market for us,” Chatonsky said.

He stressed that helping low-income population could strengthen local economies and even provide new opportunities among those in the community.

Chatonsky said that part of their search for potential investment partners in the Philippines would start with those that have multiple distribution channels that reach wider low-income population, including banks, retail stores, telecommunications providers and other financial institutions.

Since its inception, Leapfrog Investments has raised around US$130 million and has grown its investment portfolio to 12 companies. Apart from the Philippines, the company’s other priority countries for investments are South Africa, Kenya, Ghana, Nigeria, India, and Indonesia.

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