Howmuch credit should banks extend to the BOP? Are insurance policies appropriatefinancial instruments for low-income communities? For the last few weeks, theeditorial page of South Africa?sBusiness Day has taken up the debate. On the one hand, the paper reports on expanded access tocredit in poor townships. A few days later, the editors urged ?credit caution.?

Yesterday, the debate moved from credit toinsurance. According to the paper:

The industry is proposing affordable short-term householders' and cellphoneowners' policies that would provide basic risk cover. The target is to raisethose in the lowest income brackets with short-term insurance from 0,2% to 6%over the next three years. There are also proposals for affordable death anddisability products that would extend such cover to 1.7-million more low-incomeearners in the next decade.

Whilepraising the proposal, the editors urge caution ? how much insurance dolow-income South Africans really need? I think the editors make some validpoints, and I?m interested to see how this debate plays out in the paper in thecoming weeks.