Mangaluru, (The Hindu): Calling the group insurance scheme launched by the Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) for its self-help group (SHG) members a visionary move, Defence Minister Nirmala Sitharaman said on Monday that it provided security to the borrower and his or her family.

Speaking at the launch of the ‘Pragathi Raksha Kavach’ group insurance scheme, Ms. Sitharaman said that much before the governments came up with social welfare schemes, Shri Kshetra Dharmasthala was helping people in many ways.

She said D. Veerendra Heggade, president of the SKDRDP and Dharmadhikari of Shri Kshetra Dharmasthala, has educated people about their onus of repaying loans and has shown borrowers the “path of dharma”.

“Small groups were formed. The Dharmadhikari has educated them on the importance of money lent to them. With this, everyone came back to repay and avail new loans. He did not force them to pay back, but educated them to repay,” she said.

She said Mr. Heggade has ensured that money given as loans is not misused, and this was worth emulating.

Mr. Heggade said that all SHG members who have taken loans should pay the premium for the insurance. “It is just like the insurance premium you pay while buying a vehicle. All borrowers should take this insurance,” he said. With the insurance cover, the loan taken will not turn a threat to the borrower, he said, adding that the government can consider having such insurance for loans given to farmers.

Chairman of Life Insurance Corporation of India V.K. Sharma said that under the scheme, the company would cover a loan of Rs 5 lakh till the SHG member attains the age of 60. LIC will use direct benefit transfer to settle the claim within 10 days of submission, he said.

According to a press release by the NGO, the SHG member will pay a low premium to cover his or her borrowing against death. In case of death, the insurance company will settle the outstanding loan within the group up to Rs 5 lakh. The company will pay the balance of the insurance amount to the nominee.

The NGO signed an agreement with LIC for the scheme this year. The NGO will monitor collection of premium and settlement of claims.

Nalin Kumar Kateel, MP, also spoke. Mr. Heggade and Ms. Sitharaman felicitated Mr. Kateel, Belthangady MLA Harish Poonja, Puttur MLA Sanjeeva Matandoor, Sullia MLA S. Angara, and Kaup MLA Lalaji R. Mendon.