Impact Evaluation of the Provision of Health Insurance through Microfinance Networks

• Is this health insurance program effective at improving health outcomes and the ability of clients to repay their loans?
• To what extent does formal health insurance affect the ability of poor rural households to respond to negative health shocks?
• To what extent does this model induce adverse selection and moral hazard?

Partner organizations

Launched in 1998, SKS Microfinance is one of the fastest growing microfinance organizations in the world, having provided over USD $2.05 billion and has maintained loans outstanding of USD $671 million in loans to 5,301,181 women members in poor regions of India.

Established in 2005, the Centre for Micro Finance is a research center undertaking rigorous qualitative and quantitative studies on microcredit, microsavings, microinsurance, and other financial services for the poor in India.

Product

SKS Microfinance launched the "Swayam Shakti" mandatory health insurance product in May 2007. The product provided coverage for maternity, accidents, disability, and hospitalization of at least 24 hours. The premium was about USD $5-11 per year, depending on the number of family members covered. As of October 2009, 631,722 policies had been issued, covering about 1,921,679 lives.

Evaluation design

Experimental, with randomized rollout of the health insurance.

• Administrative data: Claims and loan renewal data
• Surveys: Baseline and endline household and adult surveys; midterm surveys on health, baby birthweight, and other microfinance institutions in the region

Sample size

6,000 households

Project website(s)

Report from the Field

An interview with KB Prathap, Research Associate leading field operations for this project