Over NPR 1 Trillion Invested in Micro-Enterprises: A Major Business Opportunity for Insurance Sector
Despite over NPR 1 trillion invested in Nepal's micro, small, and medium enterprise (MSME) sector, insurance coverage remains limited. A joint report by UNDP, Nepal Insurance Authority, and IIDS shows insurers can unlock high returns in this untapped market through digital technology and accessible policies.
KATHMANDU — Although Nepal's small and medium enterprise sector carries inherent operational risks, it presents a vast and untapped commercial opportunity for the insurance industry. According to a recent study, the sector could become highly profitable if insurers introduce affordable policies tailored to the specific needs of rural and small-scale entrepreneurs.
Data from the Department of Industry reveals that cumulative capital investment in small and medium enterprises surpassed NPR 10 trillion (approximately USD 7 billion) by FY 2080/81. Playing a critical role in the economy, the sector has generated over 380,000 jobs to date.
Key developments during FY 2080/81 alone include:
- New capital investment: Over NPR 11 billion (approx. USD 77 million)
- New employment generated: Over 130,000 jobs
The joint report titled 'Risk Management in Nepal's Micro-Enterprises: Insurance Coverage Gap'—authored by the United Nations Development Programme (UNDP), Nepal Insurance Authority, and Institute for Integrated Development Studies (IIDS)—highlights that insurance demand is particularly high in Koshi, Madhesh, and Karnali provinces despite limited current access.
To lower operational costs and expand market reach, the report recommends leveraging digital platforms and local financial networks:
- Digital wallets (eSewa, Khalti)
- Agri-tech platforms (GeoKrishi, PlantSat)
- Local agricultural and multipurpose cooperatives