SKS Microfinance Rolls Out Health Insurance for the Poor
Jan '2008

Mumbai, January 31, 2008:  Hyderabad based SKS Microfinance Pvt. Ltd., the new generation microfinance company is all set to roll out its health insurance product "Swayam Shakti" for the poor in semi urban and rural areas. SKS Microfinance will cover its members in Andhra Pradesh, Karnataka and Orissa by March 08 under the health insurance program. SKS Microfinance has tied up with ICICI Lombard General Insurance for this initiative. 

"Swayam Shakti" is a tailor made health insurance product, which covers the SKS member, member's spouse and two children against pre-existing illnesses, maternity, more than 24-hour hospitalization and personal accident for a period of one year.  The low-cost insurance cover offers both cashless and reimbursement options.

The roll out announcement follows a three-month successful pilot wherein it covered 50,000 members and 1.75 lac lives in the semi-urban and rural areas in six districts of North Karnataka.

Announcing the national roll, M.R. Rao, Chief Operating Officer, SKS Microfinance, said, "In over 10 years' of our experience working with the rural poor, we have seen that many of our members have used their savings or have disposed assets - in some cases even income-generating assets or have borrowed money at exorbitant rates to meet their medical emergencies. "Swayam Shakti" will address this issue and our members have easy access to healthcare by pooling their risks coupled with cashless transactions in network hospitals."

He added, "A United Nations Development Programme's report estimates that 950 million of India's population remains uninsured. The study says that one in three rural households is expected to opt for health insurance at an average annual premium of Rs 363 per household. Microinsurance products, which are aimed at the poor, reach 5.2 million Indians, which represent only 2% of the target population.  SKS Microfinance with its network of over 653 branches across the country is uniquely placed to leverage this opportunity for its members."

SKS Microfinance aims to cover its 500 branches across the country by March 2009 and over 3 million of its members and their families covering 10 million lives by March 2010 under the Swayam Shakti health insurance product. Currently, SKS Microfinance has about 1.7 million members with 653 branches across 15 states in India.

Having already disbursed around Rs 1920 crores, SKS Microfinance is targeting to reach four million poor women members in semi-urban and rural India by the year 2009. In the last year alone, SKS Microfinance has achieved nearly 170 % CAGR, with a 99% on-time repayment rate.

Impact Assessment study

In the pre pilot stage, a baseline survey covering 6000 households in 201 villages across Bidar & Gulbarga areas of North Karnataka has been conducted. The third party study aims to evaluate the impact of providing health insurance on health and financial status of rural households and to evaluate microfinance as a channel for delivery of insurance services. For the study 100 of the 201 villages were selected at random and were provided with health insurance. A continuous health survey to track health events among households in the study villages and usage of health insurance is being conducted. A end line survey covering the 6000 households will be conducted to measure the impact in end 2008.