Learning from Micro Insurance for SHGs of Pragathi Gramin Bank Chitradurga Unit (PGBCU) in Karnataka

Publication Date: Dec 2005
Published by: GTZ - Deutsche Gesellschaft für Technische Zusammenarbeit GmbH
Document Type: Case Study (PDF)

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How can micro-insurance be effectively provided for self-help-groups?

This note attempts to present the experiences of Pragathi Gramin Bank, Chitradurga Unit (PGBCU), in Karnataka, India, in implementing a micro-insurance product called Sangha Kshema Vima Yojana (SKVY).

The note presents information on:

• PGBCU and the introduction of SKVY;
• Its features and its implementation;
• The outlook for renewals and the potential for inclusion of new members;
• The performance of SKVY in the first year;
• Another product offered by a competitor.

The note lists the following lessons learned from the study:

• There is a need to de-link life and health insurance from educational scholarship.
• Revenues generated by the project are not covering costs fully and there is a need for a new revenue model.
• The expectations generated in the minds of the self-help-group (SHG) members are high; these expectations are not matched with appropriate awareness about the benefits and limitations of the insurance product.
• SHG members are exploring alternate schemes with different insurance companies and are able to benefit from the resultant competition and increased choices.

The report concludes by stressing the importance of:

• Sharing experiences;
• Creating awareness about micro-insurance among SHG members;
• Capacity-building and training for service providers;
• An appropriate micro-insurance product;
• A suitable management-information system (MIS).