Micropensions: The Scope and Progress to Date

This Note assesses if there is an adequate business case for micropensions in India. It also identifies the uniqueness in the existing micropension models in India. Delivering a long term savings instrument like pensions to the low income segment is a huge distributional as well as behavioural challenge. The success of any micropension scheme will ultimately depend upon: 1) The level of trust a distributor enjoys from its clients, which is essential for a long term association; 2) The outreach of the distributor, to bring scale; 3) Efficiency, to handle operations in a timely manner, and 4)The revenue model of the scheme, which will decide whether the commission is sufficient to motivate the distributor to mobilise resources.