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by Mathew Titus , Executive Director

The poor need insurance and they are insurable! Presentation for MIEP 2009 Monday, May 4, 2009, 10:30 – 11:00 o’clock. by Mathew Titus , Executive Director. Presentation Outline. A Snapshot of Microfinance in India A Snapshot of Sa-Dhan Micro-Insurance: The Challenge

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by Mathew Titus , Executive Director

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  1. The poor need insurance and they are insurable!Presentation forMIEP 2009Monday, May 4, 2009, 10:30 – 11:00 o’clock byMathew Titus, Executive Director

  2. Presentation Outline • A Snapshot of Microfinance in India • A Snapshot of Sa-Dhan • Micro-Insurance: The Challenge • Micro-Insurance: A few highlights

  3. A Snapshot of Microfinance in India • NABARD’s SHG-bank linkage programme services an outstanding portfolio of about INR 17,000 crore (3/08, Sa-Dhan Estimate); INR 3,500 crore savings (3/07, NABARD). • Microfinance Institutions (MFIs) service outstanding portfolio of about INR 6,000 crore (3/08, Sa-Dhan Quick Data). • Banks (credit) and Private Investors (equity) are now financing fast growing MFIs (22 MFIs with outstanding portfolio > INR 50 crore). • GoI has appointed NABARD to manage the Microfinance Development & Equity Fund (MFDEF) with a volume of INR 200 crore. • Development of “credit+” services, examples are livelihood approach (e. g. BASIX, Dhan-Foundation, Sa-Dhan study 2008), education (e. g. MaxWealth Trust, SKS)… • Urban Microfinance becoming growth driver, e. g. Ujjivan, MaxWealth Trust. Over 100 million Clients in 2012-13 33.5 million clients in 2007-08 24.6 million Clients in 2005-06 <1 million Clients in 2001-02

  4. A Snapshot of Sa-Dhan A Snapshot of Sa-Dhan • Founded in 1998 by Smt. Ela Bhatt (SEWA Bank) together with Vijay Mahajan (BASIX) & others. • Over 20 publications besides sector reports since 2003 (see www.sa-dhan.org). • Publishes Annual Sector Reports since 2004, tracking benchmarks for 6 Financial Ratios. • Code of Conduct for member-MFIs (see www.sa-dhan.org) being implemented since 2007. • Publishes Quick-Data – the timeliest reporting of any part of India’s financial sector – since 2007. • Trained over 300 junior and senior managers of MFIs. • Facilitated debate on the legislative framework – now Parliament. Over 300 members 2012-13 196 members 2007-08 150 members 2005-06 54 members 2001-02

  5. Micro-Insurance: The challenge (from Raghuram-Rajan-Commission) Only 14 per cent of people in the lowest income quartile and 26 per cent in the second quartile have life insurance (as against 69 per cent in the highest income quartile) Life insurance has come at considerable cost by way of high commissions and a large per cent of lapsed policies. Policy lapses are low only in the highest income quartile, while in all other segments at least 20 per cent respondents have had a policy lapse. The penetration of nonlife insurance products is negligible. For example, only 1 per cent of the population appears to have medical insurance. […] Almost 50 per cent of low-income-households borrow for medical and financial emergencies.

  6. Micro-Insurance: A few highlights Dozens of MFIs have introduced loan-insurance (life), mostly in a partner-agent model. E. g. SKS has also introduced retail insurance (i. e. life insurance independent of loan). GoI has earmarked INR 500 crore for SHG-members’ live insurance cover. BASIX has provided micro-health-insurance to about 1 lakh clients. VIMO-SEWA offers a composite health, life and asset-insurance for low-income-clients (women). The NGO Healing Fields has evolved a holistic approach to health insurance for MFI-clients.

  7. Thank you I whish the MIEP fruitfull discussions and learnings Mathew Titus, Executive Director, Telephone: +91 – 11 65650787 Email: titus@sa-dhan.org Website: www.sa-dhan.org

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