The Indian government has introduced a life insurance scheme for members of self-help groups (SHGs), village-based groups of about 10 to 20 women that offer savings and loans to their members, in an effort reassure bankers who invest in SHGs.
Generally, if a SHG member dies, the outstanding loan balance is transferred to the family. It has been reported that an average of 35,000 SHG members die each year, placing a significant burden on the families of the deceased. The new insurance scheme will be managed by the Society for Elimination of Rural Poverty (SERP), an autonomous society of the Indian Department of Rural Development.
The insurance scheme will be made available under conditions set by SERP, including (1) the insurance premium for the entire life of the loan is payable when the loan is disbursed and (2) premium rates are to be fixed by SERP by way of a “transparent process”.
By Witt Gatchell, Research Associate
Sources and Additional Resources:
[1] The Times of India: “Govt launches group life insurance for self-help group members”
http://timesofindia.indiatimes.com/city/hyderabad/Govt-launches-group-li…
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