(A partnership between UKaid Sakchyam and Nepal Insurers’ Association)


Insurance, a means of protection from financial loss caused by different risk events, is especially crucial for the low-income population. Without such protection, an unfortunate event can push them into further poverty. This need is particularly acute in Nepal, where people are more vulnerable to disaster, climate risk.


High distribution cost and lack of awareness about insurance among the population are considered some of the major obstacles in expanding the reach of insurance products to low-income households. Due to these factors, insurance companies mostly focus on reaching higher-income individuals in urban areas.

Sakchyam Intervention

UKaid Sakchyam Access to Finance programme initiated a discussion among stakeholders of the insurance sector in Nepal — Nepal Insures’ Association (NIA) and Nepal Microfinance Banker’s Association (NMBA) – to improve the reach of insurance among low-income households.

After several rounds of discussions, NIA and NMBA signed a Memorandum of Understand (MoU) to use Microfinance Institutions (MFIs) as distribution channels to expand the reach of insurance among their members. This is the first time these associations have formed a partnership to expand the reach of microinsurance to low-income households.

As a part of the partnership, NIA formed a pool of all 20 non-life insurance companies in Nepal, with Shikhar Insurance Company Ltd. as the appointed pool manager. A management team at NIA supported by the pool manager coordinates with MFIs and other insurance companies to distribute insurance products; the modality of the partnership is shown in the figure below.

NIA has started offering a range of microinsurance and agriculture insurance products under this partnership. It also plans to develop other tailor-made microinsurance products to meet the insurance need of MFI clients as per their feedback.

Sakchyam is providing financial and technical support train MFIs, develop insurance products, conduct different awareness campaigns, among others.


This initiative aims to ensure better penetration of microinsurance in rural areas and offer insurance products catering to low-income households. NIA has already launched a nation-wide campaign to increase the level of awareness and ensure better uptake of the insurance products. NIA has also explored other distribution channels, cooperatives, in particular, to diversify its portfolio and increase insurance penetration in rural areas.


As of March 2020:

  • 20 MFIs and 2 cooperatives have received agency license
  • More than 800 staff of MFIs have been trained
  • Insurance policies have been sold to more than 22,000 beneficiaries of low-income category
  • More than NPR 155 million amount insured