CommunityBased

Health Insurance

CHI is not-for-profit insurance scheme.

Aims at informal sector and is generally targeted at
low-income populations
Formed on the basis of a collective pooling of
health risks, and in which the members participate
in its management.
As opposed to social health insurance, membership
is voluntary rather than mandatory.
The size of the target population (i.e. the
population from which members are drawn) ranges
from a few thousands to 25 lakhs.
Often, schemes are initiated by a hospital and
targeted at residents of the surrounding area.
Option to go either to public or private sector
shall generate competition among providers for
better services

CHI has emerged as a possible means because

of:
Improving

access to health care among the

poor
Protecting the poor from indebtedness and
impoverishment resulting from medical
expenditures.

Micro Insurance

Insurance characterized by low premium and

low coverage limits and designed to service
low-income people.
Micro-insurance is the protection of low
-income people against specific perils in
exchange for regular premium payments
proportionate to the likelihood and cost of
the risk involved.

Globalization, in many developing countries is contributing to a growing

disparity between the rich and the poor.
This worsens the access of the poor to the economic opportunities through
which they could build up their assets and enhance income in order to
come out of poverty cycle.
The commercial banking sector does not consider the poor bankable owing
mainly to their inability to meet the eligibility criteria. Thus the poor in
most countries have had no access to formal financial services.
Due to the above mentioned reasons, the rural poor were relying on
informal credit channels such as local moneylenders, market vendors,
shopkeepers and others including friends and relatives.
The more rational way to help the poor could be the provision of
sustainable economic opportunities at gross-root level especially provision
of required financial services at competitive rates to support their
investments and viable business activities.
India is perhaps the largest emerging market for microfinance.

History
In 1976, Professor Muhammad Yunus
(bangaldesh) launched The Grameen Bank
Project, on an experimental basis to study
the framework of banking services for the
rural poor.

World market

In 2007, 100 million of the worlds

poorest families received a microloan.
Microfinance is fast emerging as a hot
opportunity for global players

INDIAN MARKET

Over

33 million Indians served (2007-08)

4 out of 5 microfinance clients are women.
Total MFIs: 225 (>10,000 borrowers)
Clients outreached:1,60,68,645
States covered: 25
Total districts served: 398

"Yeshaswini"
Conceptualised

by Dr. Devi Shetty.

Launched in 2002 in association with the
Karnataka state government.
Covers more than 3 million farmers and
their families in the state for all surgical
procedures and outpatient care.
The premium is only 18 rupees per month
from Rs 5 at inception.

Bandhan
Working towards the twin objective of
poverty
alleviation
and
women
empowerment.
Bandhan 's Outreach
No. of states :11
No. of branches:675
No. of beneficiaries:1.5 million
No. of staff: 4,295
Cumulative loan disbursed: Rs. 2209 crores

Target audience

Landless

and asset less women

Monthly household income less than Rs.
2,500 in rural areas and Rs. 3,500 in urban
areas
Individuals owning less than1/2acre of land
or capital of its equivalent value

Pricing strategy
First

loan Rs. 1,000 - 7,000 (rural areas)

Rs. 1,000 - 10,000 (urban areas)
Subsequent loan Rs. 1,000 - 5,000 more
than the previous loan
Tenure
The

of the micro loan is 1 year.

borrowers are entitled to a grace

period of 7 weeks.

Bandhan Health Program

Purpose: To address emergency health needs

Eligibility: Any member who has completed
two loan cycles
Loan Size varies between Rs. 1,000-5,000
Interest rate: 12.5 %

Associates ABN Amro, ICICI Bank and

HDFC to geographically diversify their
microfinance portfolio.