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

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).