Kathmandu. Small and Micro Enterprises (SMEs) in Nepal have been hit hard due to lack of appropriate insurance coverage to address the real risks and practical problems they are facing. <\/p>\n
According to a joint report by the Insurance Authority of Nepal (NIA) and the United Nations Development Programme (UNDP) Nepal, these small entrepreneurs, who account for 84 per cent of the country’s non-farm jobs, are living in constant risk of climate change, economic downturn and unforeseen losses. The irony is that most entrepreneurs are not protected because the insurance plans currently available in the market are not tailored to their real needs and the nature of the business. <\/p>\n
The situation is especially challenging for small businesses working in the pillars of our economy, such as agriculture and tourism. Agricultural insurance covers only physical damage to crops or livestock. However, there is no security if the income is dried up due to bad weather or if the loan is unable to be repaid. <\/p>\n
On the other hand, for tourism entrepreneurs, the insurance is limited only to vehicles or buildings. They do not have a reliable solution to handle the financial burden of seasonal fluctuations or sudden business closures. <\/p>\n
For example, if there is any damage to the building or vehicle of a small and medium scale hotel operating in Pokhara, the insurance company pays the claim. However, the loss of trade in Muglin does not make up for the loss of trade due to the decrease in tourist arrivals due to the landslide. <\/p>\n
The report mentions that the burgeoning paperwork, unclear rules and delays in payment of insurance claims have eroded the confidence of entrepreneurs. Many people have the impression that insurance is not about getting help, but about taking the hassle. They come to such a conclusion because there is always a fear of not being compensated or the claim will be dismissed even if there is a real loss. Small businesses are forced to stay outside the purview of formal protection due to lack of access to insurance companies in remote rural areas and the compulsion to pay large sums of insurance in the beginning. <\/p>\n
In this way, small entrepreneurs are forced to take loans at high interest rates from relatives or informal moneylenders in the event of a calamity or loss. Otherwise, they are forced to choose between selling their property or livestock, cutting employees, or finally shutting down the business after years of hard work. This pushes them into a vicious cycle of poverty and indebtedness, making them unsustainable in the long term. <\/p>\n
The report has suggested that in order to protect small entrepreneurs and secure their future, not only on paper principles but also to implement practical, affordable, simple and technology-friendly insurance system immediately.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. Small and Micro Enterprises (SMEs) in Nepal have been hit hard due to lack of appropriate insurance coverage to address the real risks and practical problems they are facing. According to a joint report by the Insurance Authority of Nepal (NIA) and the United Nations Development Programme (UNDP) Nepal, these small entrepreneurs, who account […]<\/p>\n","protected":false},"author":5,"featured_media":310205,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45067,45159,45096],"tags":[],"class_list":["post-310207","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-important-en","category-news-en","category-non-lifeinsurance-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310207","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=310207"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310207\/revisions"}],"predecessor-version":[{"id":310208,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/310207\/revisions\/310208"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/310205"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=310207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=310207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=310207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}