Bangladesh: Developing Inclusive Insurance Sector Project

Sovereign Project | 41671-022

Summary

The Project will support the development of the microinsurance sector, with microfinance NGOs as key stakeholders. The objective of the grant Project is to protect the livelihoods of poor households, especially women, from risks such as accidents, illness, theft, or natural disasters-to secure their welfare and productive or nonproductive assets through the development of low-cost inclusive insurance services (microinsurance).

The Project has four components:

(i) Component A: Market Assessment and Product Development,

(ii) Component B: Strengthening Policy, Legal, and Regulatory Framework,

(iii) Component C: Awareness Creation and Capacity Development, and

(iv) Component D: Microinsurance Pilot Scheme

Latest Project Documents

Title Document Date
Developing Inclusive Insurance Sector Project Nov 2008

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Project Name Developing Inclusive Insurance Sector Project
Project Number 41671-022
Country Bangladesh
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 9129-BAN: Developing Inclusive Insurance Sector Project
Japan Fund for Poverty Reduction US$ 2.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector Finance - Insurance and contractual savings
Gender Equity and Mainstreaming Gender equity
Description

The Project will support the development of the microinsurance sector, with microfinance NGOs as key stakeholders. The objective of the grant Project is to protect the livelihoods of poor households, especially women, from risks such as accidents, illness, theft, or natural disasters-to secure their welfare and productive or nonproductive assets through the development of low-cost inclusive insurance services (microinsurance).

The Project has four components:

(i) Component A: Market Assessment and Product Development,

(ii) Component B: Strengthening Policy, Legal, and Regulatory Framework,

(iii) Component C: Awareness Creation and Capacity Development, and

(iv) Component D: Microinsurance Pilot Scheme

Project Rationale and Linkage to Country/Regional Strategy The JFPR grant Project aims to assist the development of the microinsurance sector in Bangladesh to reduce the vulnerability of the poor to financial (loss of productive assets, damage to property, etc.) and physical (illness, injury, etc.) downturns, through improved access to reliable and affordable institutional insurance services. Experience suggests that developing the formal insurance sector is a prerequisite for enhancing the insurance outreach of large institutions, but that alone does not lead to extending insurance services to the poorer segment of the society. Well-targeted approaches are needed to enhance the insurance outreach to the poor, such as developing insurance products that address particular risk mitigation needs of the poor. Supplementing the capacity development efforts of the formal insurance sector under the loan Project, the JFPR Project aims to promote microinsurance in partnership with NGOs and community-based organizations through policy review and dialogues, capacity development, social intermediation, awareness creation, training, dissemination, and pilot schemes. Such activities are not suited for loan financing. Microfinance NGOs in Bangladesh have a well-established network in rural poor communities, a high level of accountability, and are well-governed by the regulatory authority.
Impact Improved access to affordable insurance services and reduced vulnerability of poor households, especially in rural areas
Project Outcome
Description of Outcome Increased awareness and availability of microinsurance
Progress Toward Outcome --
Implementation Progress
Description of Project Outputs

1. Policy review, including analysis and documentation of successful microinsurance schemes in other countries

2. Legal review of acts and regulations related to microinsurance, including the Microcredit Regulatory Authority Act, 2008

3. Institution and market assessment of microinsurance market

4. Participatory assessment of risk mitigation needs of poor and low-income households

5. Awareness campaign for potential microinsurance beneficiaries

6. Microinsurance pilot scheme including products, actuarial valuation, delivery modes, administration methods, and capacity-building needs

7. Pilot testing

8. Impact assessment of pilot testing (1-2 years after the Project)

Status of Implementation Progress (Outputs, Activities, and Issues)

This is an ongoing process. Substantial work has already been undertaken in this area.

The market assessment was finalized on Dec 2011 and the report was finalized by the consultant by Mar 2012, which is one of the most inclusive surveys undertaken in Bangladesh.

The market assessment was finalized on Dec 2011 and the report was finalized by the consultant by Mar 2012, which is one of the most inclusive surveys undertaken in Bangladesh.

The microinsurance pilot has been launced for 3 micro-insurance products in September 2013 and has been finalized in December 2014.

To be initiated in one and two years after the end of the project

Geographical Location Bangladesh
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design During the project design phase, extensive donor consultations were held with the Japan Bank for International Cooperation, Japan International Cooperation Agency, Department for International Development of the United Kingdom, German Development Cooperation through GTZ, and International Fund for Agricultural Development of the United Nations; their comments and suggestions were incorporated in the project design.
During Project Implementation
Business Opportunities
Consulting Services A consultant selection committee to be established for this Project will comprise representatives from the Ministry of Finance, PKSF, and other relevant government agencies. The committee will recruit the following consultants as outlined in ADB's procedures for recruiting individual consultants in accordance with its Guidelines on the Use of Consultants (2007, as amended from time to time): (i) International consultants: (a) microinsurance product development specialist (2 person-months), and (b) microinsurance legal specialist (2 person-months); (ii) National consultants: (a) project coordinator (24 person-months), (b) project facilitators (24 x 2 person-months), and (c) actuary (2 person-months).
Procurement PKSF, on behalf of the EA, will procure the equipment. All procurement will be carried out in accordance with ADB's Procurement Guidelines (2007, as amended from time to time).
Responsible ADB Officer Natalie D. Bertsch
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of FinanceMr. Saifuddin AhmedMinistry of Finance, Dhaka-1000, Bangladesh
Timetable
Concept Clearance 18 Oct 2007
Fact Finding 16 Mar 2007 to 21 Mar 2007
MRM -
Approval 27 Jan 2009
Last Review Mission -
PDS Creation Date 19 Jan 2010
Last PDS Update 16 Mar 2015

Grant 9129-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Jan 2009 07 Jan 2010 07 Jan 2010 31 Dec 2011 31 Dec 2014 01 Jul 2015
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.11 Cumulative Contract Awards
ADB 0.00 27 Jan 2009 0.00 1.08 93%
Counterpart 0.11 Cumulative Disbursements
Cofinancing 2.00 27 Jan 2009 0.00 1.08 93%
Title Document Type Document Date
Developing Inclusive Insurance Sector Project Design and Monitoring Frameworks Nov 2008

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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