Kathmandu. In recent years, the number of users registered in Nepal has exceeded the population, according to the data of the expansion of services such as banking, mobile wallets and digital payments. Despite this, the Nepal Insurance Authority, the insurance company or the service provider have not yet taken a unified initiative to connect these three facilities with the expansion of insurance access.

According to the Financial Inclusion Index Report of Nepal released by Nepal Rastra Bank last July, compared to the index value of 0.40 in the fiscal year 2078/79, 2080. The inclusion index rose to 0.47 in ’81, showing significant progress over three years.

Although the increasing use of information technology is increasing financial access to the doorsteps of the common people, there is a risk that an inclusive financial system will remain incomplete until insurance coverage is reached.

In Nepal, as in many developing countries, most households save money. Expanded access to banks and financial institutions has made it a habit for Nepalis to save. This is a very positive aspect. In Nepal, the practice of insurance to manage financial risk is still low compared to savings. Most of the insured do insurance only by reminding the insured (a kind of pressure) rather than by understanding, willingness or demand. This is also confirmed by the comments related to insurance that the insurance company representative posts on social media.

In the absence of insurance, when calamity, illness, accident or income is blocked, the limited money (savings) you have can only be compensated for a short period of time. In such a situation, if there is insurance, the protection provided by insurance will provide a strong basis for the family to get back up in the event of a major financial setback.

According to a report published by Micro Insurance Network and a global study, nearly 90 percent of the population in low-income countries do not have personal insurance.  The contribution of insurance to GDP is still less than 3 percent in many countries. Insurance penetration rate, access to claim payment, and per capita insurance investment in Nepal are still weak. This shows that while financial inclusion has increased savings and bank access, Nepal’s financial inclusion has lagged far behind in terms of risk tolerance.

Although the Nepal Insurance Authority (NEA) has said that the increasing use of information technology has increased financial access to the doorsteps of the general public, there is a risk that the inclusive financial system will remain incomplete until the insurance coverage is reached. Financial Year 2082. Increasing access to insurance has been included in the annual policy and program of 83 years. For this, the policy states that micro and agricultural insurance would be prioritized to increase the access of insurance to the remote and geographically remote areas, and to collaborate among the province, local level, private sector and stakeholders for the development of insurance business.

If we look at the progress of the last five months, it is more likely that many of the policies and programs of the NRA will be limited to paper, including the expansion of insurance and inclusion. The entire insurance sector is facing a situation of inconvenience and injustice as the NEA is stuck in the dispute of who will be the chairman.

The absence of reliable financial protection, such as insurance or insurance, is one of the main reasons why people go from poor to poorer in the face of catastrophes, disease, or agricultural damage. Inclusive insurance, on the other hand, makes life stable and easy by distributing such risks to a large population.

In a country like Nepal, where social security is weak, large parts of the population are dependent on unorganized labor, and income is uncertain, cheap and accessible insurance is becoming indispensable. An inclusive financial system is not possible unless the insurance industry, regulators, and policymakers take integrated and long-term initiatives for low-income families in areas such as simple insurance plans, easy claim payments, insurance education, and awareness.

The real measure of financial inclusion is not just the ability to have a bank account or digital access, but the ability to have an insurance safety net. If Nepal is to move ahead with the Sustainable Development Goals, it is time to prioritise safety net over savings.