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Micro Pensions for Women; Initiatives and Challenges in India


In rapidly ageing countries, increased life expectancies threaten the poor and low-income workers. India is such a country. The number of people over sixty will rise from the present 90 million to an expected 200 million by 2030. Giving the changing demography, family structure and settlements the need for pension products is increasing. This counts particular for women since they live longer and have less opportunities to create a pension by lack of formal labour force participation. This paper focuses on recent initiatives taken in India to analyze the improvement of the pension coverage and its capacity to prevent women’s old age poverty. How can the low pension coverage in India - in particular for low-income female workers in the informal economy -, be increased? The research focuses on new pension schemes introduced by the Indian Government and new micropension provisions by grass root non-governmental organizations (NGOs) and microfinance institutes (MFIs). Results from the case-study show, that only about 6 % of the clients of the Dhan Foundation (NGO) stated to have access to pension. This is in line with the national statistics. The pilot initiative for a micro pension program of the Dhan Foundation, show a clear positive result in willingness to pay for micro pensions among their mostly female clientele To improve the low coverage rate, micropensions could be of significant added value in the so called ‘multi-pillar approach’ that recognizes the complementarities between the state pension, the private sector and the civil society sector pension plans.

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  1. UNFPA collected primary data on the socio-economic status of the elderly, their living arrangements and familial relationships, health, perceptions and access to social benefits. UNFPA (2012), Report on the Status of Elderly in Select States of India, 201. Building a Knowledge Base on Population ageing in India.

  2. Microfinance institutes aim to work more efficient, contain transaction costs by using new technology or reduce their operating costs by finding a way of innovative substantial insurance for microfinance loan; so as to partly shift the burden of non repayment from the poor to some third party. However further research is needed to establish an appropriate interest rate. and

  3. Ramesh S. Arunachalam, Microfinance Consulting Group on

  4. A self-help group (SHG) is a village-based financial intermediary usually composed of 10–20 local women or men. Members make small regular savings contributions until there is enough capital in the group to begin lending.

  5. UTI Retirement Benefit Pension Scheme is a pension scheme notified by the Government of India’s Gazette Notification dated 3 Nov 2005, under Income Tax Act 1961, Sub Clause (2), Part (XIV), Section 80C

  6. The variance between the locations is quite significant. In the location of Athun, the amount of saving per household is 24,259.84 rupees - US $ 54, and in Kondalampatti the households savings numbered almost threefold, with an average of US $158

  7. Variables used: Progressive Age Composition, Household Annual Savings, Household Cumulative Savings, Household Annual Income, Value of Income Generating Assets, Access to Existing Pension Schemes, Access to Life Insurance.

  8. This survey is supposed to be the most comprehensive pan-India market research ever produced on the financial capabilities, preferences, behaviour and outlook of India’s mass market for retail finance, insurance and retirement products.


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Conflict of Interest

The authors Caroline van Dullemen and prof. Jeanne de Bruijn declare that they have no Conflict of Interest.

Informed Consent

Informed consent was obtained from all individual participants included in the study. All procedures followed were in accordance with the ethical standards of the responsible committee on human experimentation (institutional and national) and with the Helsinki Declaration of 1975, as revised in 2000(5).

Ethical Treatment of Experimental Subjects (Animal and Human)

This article does not contain any studies with human or animal subjects performed by the any of the authors.

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Correspondence to Caroline E. van Dullemen.

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• Analysis of new initiatives taken to prevent old age poverty in India.

• Low-income Indian women are facing an increasing financial risk of longevity and less family support.

• Low-income women in India’s informal economy are willing and able to pay for a micropension provision.



Table 9 Household Annual Income

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van Dullemen, C.E., de Bruijn, J.G.M. Micro Pensions for Women; Initiatives and Challenges in India. Ageing Int 40, 98–116 (2015).

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  • Ageing
  • Risk of longevity for women
  • India
  • Old age poverty
  • Micro pensions
  • Social security