Study of awareness of Micro-Insurance Policies: Comparative analysis of two Villages

Abstract

Financial inclusion is the new paradigm of growth to mitigate poverty from the country and achieve inclusive growth. Micro insurance can make an important contribution by reducing people's financial vulnerability and poverty via economic development. Many attempts have been initiated by successive governments towards financial inclusion of the poor particularly in rural areas. The awareness of insurance per se and its use is abysmally low in rural areas. This is despite the various initiatives taken by banks, co-operatives followed by priority sector lending, introduction of regional rural banks, microfinance, creation of NABARD and finally Pradhan-Mantri Jan-Dhan Yojana. In India micro-insurance has been largely supply-driven; the outcome therefore is far below expectations. This has resulted in a wide chasm and jeopardized economic and social development. Micro insurance is the provision of insurance services to low-income people. For the purposes of this study an insurance product is deemed to be a micro insurance product if the providers either targeted or sold the product to low-income people. The study is an attempt to find out about the awareness of micro-insurance in two villages of the state of Uttar Pradesh and identify the purposes for using microinsurance plans. The study is exploratory in nature.