About the DHAN Foundation
The Development of Humane Action Foundation (DHAN), founded in 1997, is a pioneering non-governmental organisation (NGO) in India. Their goal is poverty eradication.
Currently, they operate in 14 states in India and specialise in creating community-driven institutions which are owned and governed by the local communities. They target low-income households such as small and marginal farmers, farm labourers, fishermen, small traders.
Why is microinsurance important in addressing poverty?
Microinsurance is vital in addressing poverty as it buffers the risk and absorbs the financial shocks due to loss of life, loss of assets, and health-related issues.
Mutual microinsurance addresses the market’s failure to provide access to insurance services for the poor; products in the market are inadequate, inappropriate, or crucially, unaffordable. These policies can also effectively complement Government welfare insurance schemes, which helps to fill the gap in the markets, and combats the inability of the commercial insurance companies to provide suitable products to the poor.
The four aspects of DHAN’s uniqueness
The first aspect is social capital. This provides the foundation for the sustainability of DHAN. Here they use nesting institutions which allows the federation collectives to connect people to practice mutuality.
The second aspect is the enabling model. Within DHAN, all products are community-driven processes which enable the community to be involved from the inception and give their input on various themes, resulting in larger leadership.
Third, is sustainability. The core aspects of this are: providing multiple products and services, appropriate services, viable business propositions and effective financial management. They do not just provide insurance.
Fourth and final, is the holistic approach, to provide the support that looks at the whole person, not just their mental health needs. To do this, they are providing comprehensive risk management practices which included not only distributing the insurance but also introducing risk prevention, risk avoidance, and risk reduction.
Sustainable insurance
Within their community insurance programmes, DHAN works to close the gaps in the established insurance sector. They do this by offering insurance for the entire lifespan of people rather than only insuring them up to 68 years of age (the norm in India) and even providing funeral expenses. Ms. Ahila Devi believes that providing these need-based solutions is one of the unique qualities of their mutual and gives them a competitive edge in the market.
They also provide health assistance such as incidental costs, a virtual wellness centre, early diagnosis, and outreach camps. The health assistance not only covers the entire amount of packet expenditure, but it will take care of the money needed to access the hospital. This is all offered at an affordable premium cost with a simple process.
Project results
DHAN started with nearly 115,000 people covered by life insurance and 92,000 registered for health insurance. Today, thanks to the support of The ICMIF Foundation, they have reached nearly 1 million people. And their mutual microinsurance programme has reached sustainability at a local and reginal level.
Some key project figures are listed below:
- Life insurance claims = USD 805,216
- Health insurance claims = USD 246,188
- Health camps = 127 camps with 12,340 members per year
The future of DHAN’s mutual microinsurance programme
In India, there is still a low percentage (25%) of the population that is insured. This combined with low market competition, a customer base of 2.4 million and people being more financially conscious and vigilant of risk due to COVID, DHAN has a great opportunity for further penetrating their own market and helping more people stay out of poverty.
