Kenyan insurance company UAP Insurance Limited, Switzerland-based nonprofit organization Syngenta Foundation for Sustainable Agriculture (SFSA) and mobile operator Safaricom recently expanded their Kilimo Salama crop insurance program to cover the expected value of farm harvest. The new program, called Kilimo Salama Plus, pays registered farmers based on data collected from thirty weather stations. If a weather station reports extreme conditions such as drought or excessive rain that are likely to reduce crop yields, farmers in the affected area receive payouts from the program. The original Kilimo Salama program only covered the value of farm inputs.
When agro-dealers sell Kilimo Salama Plus to a farmer, a camera phone is used to scan a bar code associated with the policy. The information is transmitted to UAP Insurance over Safaricom’s mobile data network. Farmers receive text (SMS) messages via their mobile phones once the transactions have been completed. Covered payments are also made to farmers via Safaricom’s mobile money transfer service known as M-PESA. Marco Ferroni, executive director of SFSA, expects Kilimo Salama Plus to reach 50,000 farmers this year.
By Julie Moksim, Research Associate
About UAP Insurance Limited: UAP Insurance Limited is an insurance provider based in Nairobi, Kenya, that operates in Kenya, Uganda, and Southern Sudan. It was formed in 1994 from the merger of Union Insurance and Provincial Insurance. The company’s products include commercial, life, travel, corporate medical and political violence and terrorism insurance. Additionally, along with Equity Bank, a commercial bank in Kenya, UAP Insurance has launched a program that incorporates satellite technology to provide herders with insurance for their livestock in the event of drought and subsequent starvation.
About Syngenta Foundation for Sustainable Agriculture (SFSA): The Syngenta Foundation for Sustainable Agriculture (SFSA) is a nonprofit organization based in Basel, Switzerland, whose mission is to create value for resource-poor, small-scale farmers in developing countries through innovation in sustainable agriculture and the activation of value chains.
About M-PESA: M-Pesa is a Kenyan cellphone-to-cellphone cash-transfer service. (The M stands for “mobile” and pesa means “cash” in Swahili.) Launched in 2007 by Safaricom Limited, a Kenya-based cellphone service provider, M-PESA was developed by Vodafone Group Private Limited Corporation, a British multinational mobile network operator, as part of its strategy to reach the bottom of the pyramid with new goods and services. In May 2009 M-Pesa reportedly had 6.5 million subscribers.
Sources and Additional Resources:
EurekAlert Public Release: “Innovative Microinsurance Program Expands to Protect Kenyan Farmers from Drought”, February 25, 2011, http://www.eurekalert.org/pub_releases/2011-02/bc-imp022211.php
MicroCapital.org Brief, September 29, 2010: Microinsurance Provider Kilimo Salama First Payout to Kenyan Farmers Due to Low Rainfall, https://www.microcapital.org/microcapital-brief-microinsurance-provider-kilimo-salama-makes-first-payout-to-kenyan-farmers-due-to-low-rainfall/
MicroCapital.org Brief, March 31, 2010: UAP Insurance of Kenya, Safaricom and the Syngenta Foundation for Sustainable Agriculture to Expand Mobile Microinsurance Program in Kenya, https://www.microcapital.org/microcapital-brief-uap-insurance-of-kenya-safaricom-and-the-syngenta-foundation-for-sustainable-agriculture-to-expand-mobile-microinsurance-program-in-kenya/
MicroCapital’s Microfinance Universe Profile: UAP Insurance Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=UAP+Insurance+Limited
MicroCapital’s Microfinance Universe Profile: Syngenta Foundation for Sustainable Agriculture (SFSA)
MicroCapital’s Microfinance Universe Profile: M-PESA https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=M-Pesa
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