The DHAN Foundation is a development organization working for poverty reduction in Tamil Nadu, India. At present it works with over 600,000 poor families in India through different thematic programmes.
Kalanjiam Community Banking Programme, one of the flagship programmes was initiated in 1990. It organizes the poorest of poor women into 'Kalanjiams', clusters and federations. The clusters and federations are involved in activities related to strengthening the Kalanjiams and enlarging the range of financial services like savings, credit and insurance.
At present, in DHAN programs over 450,000 poor have gotten access to insurance products through coverage under insurance companies and mutual insurances. Mutual insurance programs are run by 21 federations in the states of Tamil Nadu and Andhra Pradesh. Thirteen federations are running mutual life (term/whole life) insurance programs, six federations are implementing mutual health insurance programs and in three federations mutual crop insurance programs were piloted.
The mutual life insurance programs
The mutual life insurance programs provide insurance cover irrespective of age. In first instance the people are covered under term life insurance products of insurance companies, that provide insurance cover to people of ages between 18 to 60, upon payment of an annual premium sum. However, in each federation, the members who have crossed the age of 60 are no longer insured under the term life insurance products of mainstream insurance companies, although they paid premium for a greater part of their life. This facilitated a need for a separate product for these people.
The DHAN Foundation and HelpAge India
The DHAN Foundation and HelpAge India will collaborate to initiate a pilot micro pension program for the poor segment of society including the old aged people who are not benefited by any pension program what so ever. The micro pension pilot is a vital complement to the life insurance services to strengthen the income security and dignity of the aged people. The pilot seeks to reach out to the poor in both rural and urban areas, which show distinct similarities in socio-economic and financial characteristics in the field of family systems, income and cash flow. In all, it is planned to provide pension services for 25,000 people in the pilot over a period of 5 years.
The DHAN Foundation and the Pension & Development Network
In July 2009 the Pension & Development Network and DHAN Foundation started a Joint Working Group to cooperate in the development of a micro pension scheme. In December 2009 a technical team of the P&D Network will visit DHAN Foundation to support in the implementation of the micro pension scheme.