News Summary
Reviewed Editorially.
- A study report has been released recommending the development of an insurance system to protect micro, small, and medium enterprises (MSMEs) in Nepal.
- The study, published by UNDP and the Nepal Insurance Authority, highlights insurance as a vital tool for business continuity and economic empowerment.
- Former Finance Minister Rameshwar Khanal emphasized the need for more effective roles of the Deposit and Credit Protection Fund and the Insurance Authority in MSME risk management.
18 Shrawn, Kathmandu. A study conducted by Integrated Development Studies (IIDS) with support from the United Nations Development Programme (UNDP) Nepal has recommended developing insurance to safeguard micro, small, and medium enterprises (MSMEs) against natural disasters, climate change, and other disruptions.
The study stresses the development of insurance not merely as a financial product but as a crucial instrument for business continuity and economic advancement.
On Monday, UNDP Nepal and the Nepal Insurance Authority jointly released the study report titled ‘Risk Management in Nepal’s MSMEs: The Insurance Protection Gap.’
Published in collaboration with the Nepal Economic Journalists’ Society (SEJAN), the report identifies structural barriers to insurance access and presents various policy recommendations to enhance accessibility, affordability, and availability.
The study highlights the need for policy and regulatory reforms to expand insurance coverage for Nepal’s MSMEs.
Developed by IIDS with the support of UNDP’s Insurance and Risk Finance Facility (IRFF), the report’s launch included a high-level policy dialogue focused on expanding insurance access and strengthening financial productivity within the MSME sector.
Although MSMEs are foundational to employment generation, local livelihoods, and economic growth, the study indicates their heightened vulnerability to various risks.
Accordingly, the report emphasizes the necessity of enhancing the insurance system for disaster risk management and long-term business sustainability.
During the policy dialogue, government officials, policymakers, regulators, insurance industry representatives, financial institutions, and MSME stakeholders stressed the importance of regulatory reforms, development of innovative insurance products, expansion of public-private partnerships, and linking insurance with sustainable finance and disaster risk financial management.
Former Finance Minister Rameshwar Khanal underscored the significant contribution of MSMEs to Nepal’s economic growth and called for more effective roles of the Deposit and Credit Protection Fund and Nepal Insurance Authority in MSME risk management.
He advocated strengthening government support for insurance premiums to boost MSME resilience.
Kyoko Yokosuka, UNDP Nepal’s Resident Representative, noted that while MSMEs form the backbone of Nepal’s economy, they are the most impacted by diverse risks, making expansion of insurance protection critical for business, employment, and overall economic upliftment.
She expressed commitment to continue collaboration with the government, Nepal Insurance Authority, private sector, and development partners to expand inclusive insurance systems.
Sushildev Subedi, Chief Executive Officer of the Insurance Authority, expressed confidence that the study’s recommendations would help establish insurance as a strategic investment for sustainable development and upliftment of MSMEs and guide upcoming policy and regulatory reforms.
