Govt plans Islamic insurance for low income groups

The Sindh government, after having successfully launched Sindh Bank, now plans to establish Shariah complaint and conventional insurance companies that would provide much-needed financial cover to the middle and low income groups in the province. The provincial government, in proposed budget for 2013-14, has earmarked Rs 200 million to be spent on the development of Modaraba, leasing and insurance firms. The development of the proposed financial institutions is aimed at further endorsing the success of the Sindh government, Sindh Chief Minister Qaim Ali Shah told Sindh Assembly Monday in his budget speech. The initiative, he said, would provide innovative and competitive financial products like Ijara, Morabaha, Musharaka and other Islamic financial products along with creation of job opportunities. The Sindh government has projected to create 20,000 jobs during FY14, as the chief minister announced in his speech. “Insurance coverage in our country is very low,” he said adding that “Realizing this gap we intend to establish an insurance company which would provide the much-needed financial cover to middle and low income groups at competitive rates,” Shah said. Likewise, the chief minister said, the availability of affordable capital was essential for the asset creation. Therefore, he said, a leasing firm was also part of this plan. The proposed facility would ensure the availability of “cheap capital” for the urban and rural areas lacking the traditional mode of financing.