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Transcript of Bharagav Dasgupta
8/6/2019 Bharagav Dasgupta
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Creating a purple patch:
Social Security for poor
March 17, 2010
Financial Inclusion & Responsible Microfinance
New Delhi
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Needs pyramid
Source : National sample survey organization (NSSO),Government of India, FINCA¶s poverty pyramid
People o ave fe (if
any) assets ± very limitedc ances to earn money
Credit
Savings
Entrepreneu
rial Poor
Self Employed
Poor
Laboring Poor
Very Poor
People o are slig tly
belo t e poverty line
InsurancePoor people o are meeting
t eir basic needs by runningmicro-businesses
Farm laborers, domestics and
unemployed orkers
Safety Net Program
Income increasing
across
socioeconomic
classes
Availability of credit
restricted to lesser categories
Most of t e ot er
classes still
dependant on savings
Making t em very
vulnerable to risksand uncertainties
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Impact of risk and response
CONSEQUENCES� Income Loss
� Asset Loss
� Need for Lump sum Cash
RES ONSE� Use Savings
� Borrow: Informal/Formal sources
� Sells assets
SECONDARY IM ACTS
� Diversion of household resources� Depleted financial reserves
� Indebted for future income
� Loss of income
� Loss of access to financial markets
rotection :
Affordability+Availability+Awareness
Specific to household
Health Events
Life Cycle Event
Covariate (common)
Weather variations
Natural calamity
Epidemic
Crop failure
rice fluctuations
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Protection tools: Current landscape
General Insurance penetration is 0.6% of GDP as comparedto world average of 2.14%
Despite rising rural prosperity
Attributed to low consumer preference, untapped ruralmarkets and constrained distribution channels
A survey conducted among urban and rural below povertyline showed
67% of the respondents had used private healthcare
Spent Rs.100 to 250 per family per year on out patientservices
Approximately 45% of the families borrowed money for health needs
Nearly 94% of the families had borrowed less thanRs.5000
Source :SKS Survey, 2005-2006; Health insurance trends
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Micro-insurance fundamentals . . .
Illiterate
population
� Simple Products
� Transparent process
� Quantification of Benefits
� Simple Products
� Transparent process
� Quantification of Benefits
Infrastructur
e
� Online Offline solutions, Smart cards
� Over the counter enrolment� Door step service at villages
� Online Offline solutions, Smart cards
� Over the counter enrolment� Door step service at villages
Products
� Index based weather products
� Limited access healthcare -Micro Health Insurance
� Protecting income generation assets -2W, Shops, Pumps
� Index based weather products
� Limited access healthcare -Micro Health Insurance
� Protecting income generation assets -2W, Shops, Pumps
Admin
� Direct Sales Model- Rural Agents
� Kiosks
� Use of alternate channels- Rural financial institutions,
MFIs, SHGs, Rural Retail chains
� Direct Sales Model- Rural Agents
� Kiosks
� Use of alternate channels- Rural financial institutions,
MFIs, SHGs, Rural Retail chains
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Universal insurance solution
Need for integrated
coverage
Life, Accident, Health,
Property, Weather
Simple and easylanguage
Flexible payment options
Ex. Sampoorna Suraksha program launched with aNBFC, awarded with Golden Peacock Award for
Service in Jan 2010
Packaged offering: Major illness, Accident, Life, Shop
cover
Multi lingual policy wordings
Premium linked with loan installments
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Adverse selection
Moral hazard
High operation
costs
Product
understanding
Mandatory/Minimum Enrolment, Fixed Window periods
Renewal linked to loan Renewal, Pre-authorization, Co-
payments
Optimal use of Technology, simpler documentation
Marketing initiatives at village level and doorstep education
Out Patient Clinics, Mapping of Health Seeking behavior and
referrals
Effective grievance, re-dressal in public meetings, Timely
payments
Biometric Identification, Audits and Analysis of claims
Networking of Credible Providers, Audits
Inadequate
infrastructure
Lack of trust
Fraud
Quality
Essentials at solution design stage
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� Multi- channel approach� Multi- channel approach
Last Mile ConnectivityReaching the target Audience
� Creating basic visibility
� Mass media used to reach wider groups
� Focused discussions with groups at the villages
� Marketing initiatives at village level
� Health camps� Capacity building measures undertaken
� Creating basic visibility
� Mass media used to reach wider groups
� Focused discussions with groups at the villages
� Marketing initiatives at village level
� Health camps� Capacity building measures undertaken
Awareness
AvailabilityDistribution
Rural agentsRural agents
E-enabled kiosksE-enabled kiosks
Micro-finance
Institutions
Micro-finance
Institutions
Govt. subsidized/
funded schemes
Govt. subsidized/
funded schemes
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Myth : Rural markets are expensive
Truth : Rural insurance is not only commercially viable butalso profitable
TRUST is the key success factor
Improving the lives of the billions of people at the bottom of the pyramid is a noble
endeavour. It can also be a lucrative one«C.K. Prahalad
Fairly priced & a relevant productFairly priced & a relevant product
Cost effective distributionCost effective distribution
Administration using technologyAdministration using technology
Assuring accessibility & qualityAssuring accessibility & quality
Experimentation
Innovatio
n
Time
Flexible Policy
In conclusion
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Thank you