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CEO Weekends: IFC, EU & MicroEnsure Insure Small-scale Farmers in Rwanda And Zambia

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Farmers in Rwanda and Zambia will soon be protected from bad weather as IFC, a member of the World Bank Group, has signed two grant agreements with MicroEnsure Ltd, valued at about $650,000 combined, to increase the supply of index-based weather insurance to small-scale farmers in the two countries.

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This should help curb the adverse effects of climate change and to strengthen food security.

The grants were issued by the Global Index Insurance Facility (GIIF), a multi-donor trust fund financed by the European Union, Japan and the Netherlands, and implemented by IFC and the World Bank.

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“As a pioneer in the provision of weather index insurance to smallholders since 2004 we have seen the impact that these products have in unlocking credit to fund inputs, resulting in a dramatic increase in yields and rural income. Our on-going relationship with the team at IFC has been central to our growth in this sector,” Richard Leftley, CEO MicroEnsure and MicroEnsure Asia.

The land in Rwanda and Zambia experience extreme weather in some areas, this limits smallholder farmers as they are afraid to invest in crops as they may fail; this leads to reduced yields and continued food insecurity.

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Traditional indemnity-based agricultural insurance has seen little success due to high transaction costs and premiums. Index-based insurance, which pays out benefits on the basis of weather data without costly field verification of losses, is a more efficient risk management tool. Supported by the GIIF grants, MicroEnsure is expected to offer index-based insurance to an additional 90,000 small-scale farmers in Rwanda within two years and 15,000 small-scale farmers in Zambia within one year.

Gilles Galludec, IFC GIIF program manager, said “There is great potential for index insurance to strengthen economic security for smallholder farmers in Rwanda and Zambia while also serving to further the development of sustainable insurance markets in both countries. A reduction in weather-related risks also stimulates investment in farming by making it viable for financial institutions and agribusinesses to extend credit to smallholder farmers for long-term investment in the land. Index-based insurance is a powerful tool in the fight against poverty.”

Headquartered in the UK, with a regional base in Nairobi and country operations across Africa and Asia, MicroEnsure works with mobile network operators, banks, microfinance institutions, and other aggregators to provide insurance for the mass market. MicroEnsure has been operating since.

 

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Caroline Vutagwa
Caroline Vutagwahttps://my.techmoran.com
Minding my own business is not enough for me that's why you will always find me minding Africa's Businesses as well as Technology and of course letting you know about it. Talk to me on [email protected]

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