HNB adds value to Gami Pubuduwa with new insurance scheme

Channa Kasturisinghe

INSURANCE: Hatton National Bank (HNB) yesterday launched a unique insurance scheme for the benefit of rural community under the bank's 'Gami Pubuduwa' micro finance scheme.

This scheme will provide any micro entrepreneur, obtaining credit facilities under Gami-Pubuduwa scheme up to Rs. 1 million with an insurance policy which covers property loss, mortgage protection and loss of life.

HNB's CEO and Managing Director Rajendra Theagarajah said that the Bank initiated this insurance scheme as there is a need to address the risk management aspect of micro finance.

"Risk management aspect of micro finance is an area which is very much neglected by institutions lending to rural entrepreneurs and farmers. We have found that many micro entrepreneurs are facing difficulties in providing acceptable guarantors for their credit facilities. The introduction of the insurance scheme would allow borrowers to find guarantors easily. The dependants of the borrowers too will be relieved in the case of any eventuality as the burden of the loan liability would be taken care of by the insurer," he said.

Deputy General Manager Chandula Abewickrema said the present portfolio of Gami Pubuduwa scheme stands at Rs. 1.5 billion serving 14,000 clients in 104 units throughout the country and apart from micro lending, there is a portfolio of nearly Rs. 1 billion rural deposits mobilized by the scheme.

"Initially, we are providing this, the insurance scheme is for new loans only," he said.

The bank launched the new scheme together with HNB assurance Ltd.