Study on the Microinsurance Industry in Nepal
This report includes brief surveys undertaken to assess the supply and demand for microinsurance in Nepal, and the current challenges and way forward. It also reviews the players in the sector, the microinsurance products on offer and an examination of the risks faced by low-income households, their coping mechanisms and general awareness of the insurance products. A total of 303 respondents representing both microfinance institutions (MFIs) and non-MFI members participated in the survey out of which 153 were MFI members while the remaining 150 were not a member of any MFI.
The survey found that advancing microinsurance in Nepal is a challenging task. Lack of cost-efficient distribution channels, awareness, adequate infrastructure, and human resources were cited as some of the major obstacles. Regulators and other stakeholders, therefore, need to work together to bring informal microinsurance, a non-regulated financial product used to cover different risks of people, into the mainstream insurance sector. In addition, creating awareness of insurance, developing appropriate products, and using cost-efficient distribution channels are needed to expand microinsurance.