Kenya's crop insurance wins international innovation award

Kenya's Kilimo Salama, Kiswahili for 'safe farming' beat over 200 entries to win the prestigious Financial Times' award for Technology in Sustainable Finance, recognizing their groundbreaking work to provide smallholder farmers with access to insurance cover.

The FT’s Award for Technology in Sustainable Finance recognises organizations and initiatives that address scarcity in essential goods and services and that demonstrate  leadership and innovation in addressing environmental, social and corporate governance issues in business.

The insurance programme, which is a partnership between the Syngenta Foundation for Sustainable Agriculture and UAP Insurance, is an innovative, pay-as-you-plant, index-based, micro-insurance program for smallholder farmers in Kenya and the first in the world to use a mobile network-based platform and on-the-ground solar weather stations to provide smallholder farmers with low-cost insurance policies.

“When it comes to drought, most farmers have no choice but to simply pray for rain. And if the rains don't come, the crops don't grow. At a time of global change, Kilimo Salama is giving farmers more options so they can meet these challenges and prosper,” said Marco Ferroni, Executive Director of the Syngenta Foundation for Sustainable Agriculture.

Kilimo Salama has seen an eventful second year marked by severe weather and explosive farmer demand for insurance to mitigate current and future weather risk. The programme has just completed one of the largest index insurance payouts ever experienced on the continent and has now insured nearly 64,000 farmers for the next season.

It is now making plans to expand to other countries in the region, beginning with Rwanda.

Farmers under the programme are clustered in a defined area covered by ‘Kilimo Salama’ weather stations that monitor the weather over a full season. The data collected is used to help compute compensation claims due to farmers, which can be partial or full. ‘Kilimo Salama’ so far has 27 weather stations. Compensation can be monetary or by replacing farm inputs or seeds.

Personal details are taken down plus the phone number from which the farmer receives a registration confirmation alert from ‘Kilimo Salama’ with a policy number. After registration, a farmer gets charged 5 per cent extra on every product he or she buys - for example, if a product costs Sh400 a farmer pays Sh420. The extra Sh20 acts as a premium that goes to UAP.

In the stockists’ outlets, farmers are also advised by trained stockists on the seeds suited for their climatic region.

Now in its seventh year, The FT/IFC Sustainable Finance Awards are the major global awards for environmentally and socially responsible banking and investment. The 2012 Awards attracted 161 entries from 145 financial institutions and 36 non-financial groups in 67 countries.

"The winners of this years awards should be congratulated as they stand out from a very strong group of financial institutions that are leading the way on making environmental and social considerations a major part of their business. We were particularly impressed with the range of projects short-listed, notably the rapid development of mobile phone applications that are changing the lives of billions in the poorest parts of the world", said Martin Dickson, Deputy Editor of the Financial Times and co-chair of the awards judging panel.

Written by Bob Koigi for African Laughter

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