Beema Samiti, the insurance regulatory authority of Nepal, reportedly plans to introduce an Agriculture and Livestock Insurance Directive making it obligatory for non-life insurance companies to offer insurance policies on crops, livestock and poultry. The annual insurance premium will range from five to seven percent of the sum assured.
According to a statement attributed to Mr Bhaskar Mani Gyanwali, spokesperson for the country’s central Nepal Rastra Bank (NRB), “the absence of proper insurance of crops, livestock and poultry has deterred financial institutions from financing agro projects.” There are currently no Beema Samiti-licensed insurance companies that provide crop and livestock insurance. Some microfinance institutions (MFIs), agricultural cooperatives and nongovernment organizations (NGOs) provide these types of insurance but only for amounts less than NPR 100,000 (USD 1,140). Separately, NRB reportedly has asked all Nepalese commercial banks to increase their lending to the agriculture and energy sectors to ten percent of all lending by mid-July 2014.
For the year 2011, NRB reported total assets of NPR 299 billion (USD 3.67 billion).
By Charlotte Newman, Research Associate
About Beema Samiti (Insurance Board)
Beema Samiti, the Nepali insurance board, was established under the Insurance Act of 1992 and operates as an agency of the Nepalese Ministry of Finance. Beema Samiti’s mission is to “help develop the Nepalese economy and uplift the living standard of the Nepalese people through fair, equitable and sustainable development of the whole insurance sector”. It issues, renews, dismisses the licenses of insurance companies, insurance surveyors and insurance agents.
About Nepal Rastra Bank
Established in 1956, NRB is Nepal’s central bank. NRB formulates and monitors the nation’s monetary and fiscal policy and regulates the nation’s banking and financial sectors. For the year 2011, NRB reported total assets of NPR 299 billion (USD 3.67 billion).
Sources and Additional Resources:
The Himalayan Times: “Agro Insurance to Encourage Lending in Agriculture Sector,” http://www.thehimalayantimes.com/fullNews.php?headline=Agro+insurance+to+encourage+lending+in+agriculture+sector+&NewsID=359811
MicroCapital.org story, June 18, 2012, “MICROCAPITAL BRIEF: Nepal Rastra Bank (NRB) Limits Microloan Interest Rate Changes, Adjusts Provisions for ‘Deprived-Sector’ Lending,” https://www.microcapital.org/microcapital-brief-nepal-rastra-bank-nrb-limits-microloan-interest-rate-changes-adjusts-provisions-for-deprived-sector-lending/
MicroCapital.org story, April 20, 2012, “MICROCAPITAL BRIEF: Insurance Regulatory Authority of Nepal Beema Samiti Announces Insurance Companies to Offer Microinsurance to Individuals, Agribusinesses,” https://www.microcapital.org/microcapital-brief-insurance-regulatory-authority-of-nepal-beema-samiti-announces-insurance-companies-to-offer-microinsurance-to-individuals-agribusinesses/
MicroCapital Universe Profile: Beema Samiti
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Beema+Samiti+(Insurance+Board)
MicroCapital Universe Profile: Nepal Rastra Bank (NRB)
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Nepal+Rastra+Bank+%28NRB%29
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