Indian microfinance institution (MFI), SKS Microfinance (SKS) announced it will partner with Bajaj Allianz Life Insurance Company to provide its members with a group insurance product. The product will be distributed by SKS and- according to the CEO of Bajaj Allianz Mr. Kamesh Goyal- will give Bajaj Allianz access to the micro-insurance market. The product will be called Swayam Shakti Suraksha and is modeled after a standard endowment policy. Beneficiaries will pay premiums as low as 45 rupees per month (or USD 1.13) for a policy with a minimum of 5-years. The product will insure sums as little as 2,500 rupees (or USD 62.75) and also offers additional accidental disability and death benefits. Clients may also obtain a loan under the program for up to 85 percent of the cash surrender value- the amount a policyholder is paid if the policy is voluntarily terminated before its maturity or the insured event occurs.
The product will be rolled out in the next 6 months in all of SKS’ branches across 15 states. SKS will start with 100 branches in Andhra Pradesh, Karnataka, and Orissa.
In 1997, SKS Microfinance was established in Hyderabad, India by Vikram Akula. Since then, SKS has provided over USD 170 million loans to over 500,000 women clients. As of March 2007, SKS had a gross loan portfolio of USD 63 million, a debt-to-equity ratio of 379 percent, and a ROA of 1.75 percent. In 2003, the MFI received a rating of “Alpha minus” from specialized microfinance rating agency M-CRIL. Other stories on SKS’s investments and programs can be found at MicroCapital.
Bajaj Allianz Life Insurance provides life insurance services throughout India and is a joint venture between global insurance company Allianz SE and motorcycle maker Bajaj Auto. Starting operations in 2001, the company has 850 branches nationwide and sold over 2 million policies in 2006. Allianz is one of the largest global asset managers with over Euro 1 trillion assets under management and 115 years of operation. Bajaj Auto is a 55-year old 2-3 wheeler manufacturer in India.
by Jennifer Lee
Additional Resources:
SKS: Microfinance: Home
Allianz: Home, Bajaj Allianz Life Insurance Company
Bajaj Auto: Home
MIX Market: Home, SKS Microfinance
The Economic Times: “Bajaj Allianz Life Insurance ties up with SKS Microfinance”, April 15,2008.
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