Kathmandu. The traditional and limited range insurance policies currently being sold by insurance companies are becoming irrelevant for small and medium enterprises. According to the study, entrepreneurs in the agriculture and tourism sector are waiting for a single integrated insurance plan instead of buying separate insurance policies for different risks.
A study report titled ‘Risk Management in Nepal’s Micro Businesses: The Gap in Insurance Security’ jointly released by the United Nations Development Programme (UNDP) and Nepal Insurance Authority (NIA) states that the non-life insurers have not been able to implement insurance policies to address the risk bearing needs of micro and small entrepreneurs.
Small entrepreneurs are disappointed that the insurance covers only the direct loss of livestock and crops in agriculture, but does not cover the loss of storage, damage to the goods kept in the cooling center due to the interruption of electricity supply or the risk of not recovering the loan. Apart from this, even though there is insurance for vehicles and buildings in the tourism sector, there is no insurance policy available in the Nepali market to cover the loss of income due to the closure of the road due to floods and landslides. Small businessmen have demanded an integrated insurance policy that covers crops, livestock, equipment, business continuity and credit risk under one umbrella.
This report is based on extensive field research. In this, representatives of 134 small and medium enterprises from seven provinces of Nepal were consulted through surveys and focused group discussions. Important information and insights were gained from interviews with policy makers, regulatory bodies, and representatives of the insurance sector.
Desk research was conducted to prepare the necessary context and background for the findings of this study. This report has identified various sectoral risks, insurance barriers, and misconceptions about insurance.
