Download sector_report1.pdf - Microfinance and Development ...

29 The rationale for transfer programmes (subsidies) in social security is well recognized and indeed may
be the only way of reaching the lowest one or two deciles of the income distribution, although more
through social assistance programmes than social insurance. A high proportion of the poorest of the
poor are too old, ill or infirm to benefit from microcredit which can assist only the economically
active poor.
30 Several sources point out that members are often not clear about their entitlements, or receive
documentation about it. Many so called "life" insurance schemes instead of offering beneficiaries a
fixed sum in the event of death, pay out an amount equal to the loan received with the unpaid balance
being deducted.
31 For example Tata AIG's Karuna Yojana life (natural and accidental death) insurance scheme especially
designed for SHGs, with monthly payment of premium or Rs 25, and with provision for total premium
paid along with 25 percent interest to be returned after expiry of the term of 15 years.
32 Such as ICICI Prudential's Salam Zindagi and Mitra policies.
33 ILO 2005 (2) reports that in the latest version of the scheme some of the DHAN Foundation federations
participate in there is a also a contribution of 200 percent (Rs 730 per year) by the government
towards the premium, and that a money back scheme has been incorporated into the product under
which lump sum amounts are paid back to the policy holder every ten years. However, it is learnt that
the scheme has since been withdrawn. The pension benefit was not strictly a pension since it was
lacking an intergenerational component, but really a provident fund.
92