Kathmandu. Unexpected natural disasters caused by climate change, unseasonal rains, droughts, floods and landslides are knocking down Nepal’s small agriculture and tourism entrepreneurs.
According to a study, 24 percent of the businessmen in the agriculture sector are directly affected by floods and 21 percent are directly affected by landslides, while in the tourism sector, the business comes to a standstill due to the breakdown of the road network. To solve this, a study report published by the United Nations Development Programme and the Nepal Insurance Authority has suggested a comprehensive expansion of technology-based parametric or meteorological index-based insurance.
The report concludes that small enterprises facing climate risk would be immediately relieved if a claim payment system could be implemented without hassle-free paper when rainfall or drought occurs exceeding the limit based on satellite and meteorological data.
The report shows that the government, regulatory body Nepal Insurance Authority and insurance companies need to work in an integrated manner to bring Nepal’s small business and enterprise sector under the ambit of insurance. The report mainly presents the following solutions and suggestions:
1. Separate micro-enterprise insurance structure: Policy makers should bring special insurance policies and policies targeting micro-entrepreneurs.
2. Simplification of Claim Payment Process: To ensure quick and easy claim payment by adopting digital technology.
3. Digital distribution and satellite technology: Provide last-mile insurance coverage through digital wallets, telecom and agriculture apps.
4. Concessional and insurance premium subsidy: To clear the arrears of agricultural insurance subsidy provided by the government on time and to waive the insurance premium for micro entrepreneurs.
5. Literacy Campaign: To create awareness about simple insurance policies and claim process in local languages.
The study report titled ‘Risk of Micro Enterprises in Nepal and Insurance Cover 2025’ published by the United Nations Development Programme (UNDP) and Nepal Insurance Authority (NIA) has pointed out the need for appropriate insurance cover to protect micro enterprises as they have been making significant contribution to Nepal’s economy.
