90 percent of Nepal's small enterprises at high risk, but insurance access limited to just 10 percent
A joint study by UNDP and the Nepal Insurance Authority shows that while about 90 percent of Nepal's small and medium enterprises are highly exposed to climate and business risks, only 10 percent have access to insurance. These enterprises, which account for 84 percent of non-agricultural employment and contribute 22–27 percent to GDP, remain underserved and out of reach of the existing insurance system.
Kathmandu. A study has shown that while about 90 percent of Nepal's small and medium enterprises are highly exposed to climate and business risks, only 10 percent have access to insurance.
According to a joint study report by the United Nations Development Programme (UNDP) and the Nepal Insurance Authority, the existing insurance system is inadequate and out of reach for small entrepreneurs. Small enterprises, which account for 84 percent of total non-agricultural employment in Nepal and contribute 22 to 27 percent to GDP, are forced to live with a large gap in insurance protection.
Based on a survey of more than 134 small entrepreneurs and businesspeople across all seven provinces, the report concludes that the insurance sector has failed to address the real risks faced by small entrepreneurs.
The report notes that when shocks such as natural disasters, floods, landslides, and economic recessions occur, small entrepreneurs are compelled to rely on their limited savings and high-interest loans. This indicates a serious challenge to the sustainability and financial security of small enterprises.