Micro-Insurance as a Tool for Financial Inclusion of Rural Women in India: A Literature Review

Affiliation

Abstract

Financial inclusion is a key driver of sustainable economic growth and gender equality especially
in rural India. While the formal banking mechanisms have grown faster, the vulnerable population
like rural women are highly susceptible to sudden socio-economic shocks, vagaries of climate and
health crises. The paper discusses about the literature review on role of micro insurances as a
strategic tool to bridge this security gap and fostering the financial inclusion of rural women in
India. The paper discusses the current scenario of micro-insurance delivery models such as SHG
linkages and public-private partnership models. Study has been done on the basis of secondary
data and information from the academic journals, industry reports and regulatory frameworks of
Insurance Regulatory and Development Authority of India (IRDAI). The review shows that the
implementation of customised micro-insurance schemes can offer a substantial financial safety net
to women in rural areas, thereby decreasing their indebtedness and improving their socio
economic resilience. However, the study highlights major structural challenges that hinder mass
adoption including low financial literacy, complex claim settlement processes, trust issues and lack
of gender-sensitive product design. The paper concludes with policy recommendations which
primarily focus on improvement of digital mobile based delivery channels, simplification of
documentation and targeted financial awareness campaigns. The review concludes by suggesting
that the integration of micro-insurance into wider financial literacy programmes will be essential
in transforming rural women from passive financial participants into powerful economic agents.

Keywords

Micro-insurance, Financial Inclusion, Rural Women, Economic Resilience