Sa-Dhan Newsletter Volume 1 Issue 4

Micro-Insurance

Premium

6

Viability

Once in a

Since the programme is to be

Accounting staff

collected and

quarter

expanded, there is a need to

and  veterinary

claims settled

look at the programme as a

doctor

separate profit center and look

seriously at the costs and

benefits.

On various

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Client

Periodical/

Very informal. More of problem

ED's meetings

aspects of the

sporadic

satisfaction

redressing than assessing the

with staff,

scheme

client satisfaction. Needs to

women, staff

be strengthened to enable

meeting with

expansion of the programme.

clients.

The cattle insurance programme has crossed the nascent stage and is on the take off stage. A concise reporting

and reviewing system is the need of the hour.

5.

Increasing the out reach

The programme at present covers the animals bought out of Rabo bank loan. The scheme has the potential

to cover animals bought through any loan. However, this involves acceptance of the programme among the

clients and more particularly the staff . The organization is undertaking a survey of population of animals

in the households of all the SHG members. For example, in Panchapatti field unit, the animals owned by sangam

members are 2,645 cows and buffaloes, and 2,997 goats and sheep. However, the present coverage under

insurance scheme is hardly 10 percent of the animals at 258 cows and buffaloes. Thus there is vast scope

of increasing the outreach under the scheme. The ongoing animal census exercise would be completed soon.

This exercise will help the organization to develop strategies to expand the programme.

6.

Cattle Committees

LEAD has initiated formation of cattle care committees at the cluster level. In each SHG/village one member

is chosen as the member of the committee. The member should have knowledge of cattle rearing and command

respect of the women.  A ten member cattle committee is formed. It is planned that this committee will have

a larger role to play in the future - organizing cattle camps, loan recommendation and sanction, monitoring

of utilization of loan and repayments, verify and recommend cattle death claims. It is also planned that these

committees will be involved in local management of funds of the scheme so that they are aware of profitability

or otherwise of the programme and act responsibly. The successful functioning of these committees can reduce

transaction cost to the borrower, bring in more client perspectives to the programme as well as ensure

sustainability of the programme in the long run.

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VIABILITY OF THE PROGRAMME

So far, LEAD considers the programme viable, in view of the amount of premium collected, staff salary paid

and claims settled. The details pertaining to the programme have been segregated from the annual accounts

of the organization and the income and expenditure for the activity has been constructed. Both direct and

indirect costs are included in calculating the programme costs. The direct costs include salary of the veterinary

staff; fees paid to the consultants and cattle care medicines. The indirect costs include the salary of other

staff and overheads. The salary of the other staff has been apportioned depending on the time spent by them

for veterinary activity. The overheads have been apportioned as a proportion of staff salary. The income and

expenditure statement is given in Table 6.

Recently the organisation decided to include all the animals bought by the members under the Rashtriya Mahila

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Kosh(RMK) loan. RMK loans were to be used for income generating activity. The members state the purpose of the

loan at the time of applying for a loan.  Purchase of animals was a very common purpose stated by the women at

the time of applying for a loan. However, there is no subsequent check whether the money was used for the stated

purpose. It is usual for the members to use the money for more than one purpose including the stated purpose. When

the members became aware that animal loans will involve compulsory insurance, they immediately avoided giving the

purpose of the loan as for purchase of animal. The field staff who are in touch with the members can easily know

for what purpose the loan is actually used since they move with the villagers very closely. Looking to the tough challenge

of convincing the women to take up insurance, they also chose the easy way out and stated that no one had purchased

animals.

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