Today's Paper

SHG movement takes a leap forward

Plan to give insurance cover for villagers

S. Annamalai

MADURAI: The self-help group movement has taken a giant leap forward with the formation of a mutual trust, `Gangai Vattara Kalanjia Mutuals' (GVKM), in Madurai, that aims at providing social security services to the poor in rural areas.

A comprehensive insurance plan has been drawn up to cover death, disability, illness, livestock and crop and taking the family as a unit. The formation of a mutual insurance organisation is the culmination of a successful experiment conducted by the Madurai-based Dhan Foundation in Mayiladumparai in Theni district where the Kadamalai Kalanjia Vattara Sangam has been providing life and health insurance cover to SHG members since 1997. It also draws inspiration from the Mutual Insurance Association of Netherlands (MIAN), which has been providing insurance cover to micro credit beneficiaries in Sri Lanka, Nepal and the Philippines. Mutual insurance has come as an answer to families which could not bear their debts in the event of the death of the breadwinner, says Toon Bullens, president, Federation of MIAN.

He does not look at mutual insurance as "a product offered to people but a framework of solutions (to their problems) as part of empowerment." The GVKM has as its objectives provision of insurance cover for death of individuals and family members, disability, ill health, death of livestock, loss or damage to properties and loss due to crop failure or damage.

The premium has been pegged at a low level in the absence of operational and administrative costs. As in the SHG concept, the interest on investment of the insurance fund belongs to the members, which would augment the fund or reduce the premium further. A unique feature of the insurance cover is that all claims are settled within hours, sans much of paperwork. In the Kadamalai experiment, the insurance cover is so advanced that it has a tie up with a local hospital.M. P. Vasimalai, Executive Director, Dhan Foundation, said that it has been planned to start 11 more mutual insurance organisations this year in Madurai, Ramanathapuram, Theni and Dindigul districts of Tamil Nadu and in Andhra Pradesh and Karnataka.

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