by John Oyuke
The battle to break barriers of access to investment instruments is on thanks to micro-insurance.
The Illinois based Opportunity International subsidiary, MicroEnsure is set to enter the local insurance industry promising millions of low-income families and individuals affordable insurance cover.
MicroEnsure President and Chief Executive Richard Leftley said the firm is in discussions with the Insurance Regulatory Authority (IRA) to establish local operations and expect to have authorisation before the end of this year.
"We are continuing our mission of providing insurance products for the poor. The products meet specific needs of the local market," he said last week.
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The products expected include Weather Index Crop Insurance considered a powerful tool to alleviate poverty in the face of climate change.
Typical crop insurance provides compensation to smallholder farmers when drought or other adverse weather strike.
The insurance protects farmers from financial risks associated with adverse weather conditions such as drought, excess water, or typhoons. They have previously been excluded from the banking system as commercial banks and micro finance institutions have been hesitant to lend them money in case crop failure resulted in an inability to repay.
But when farmers are insured, they can access credit to purchase vital farm inputs. The policy enables secure extension of credit to the farmers for the purchase of quality farm inputs.
The firm has piloted crop insurance programmes in Malawi, Tanzania, Rwanda, India and the Philippines—and soon in Uganda and Ghana—covering a variety of crops including rice, maize and tomatoes.
The agency also offers credit life, term life/funeral, property and health insurance.
Leftley told FJ last week the firm has already designed a wide array of low-cost insurance products that match the needs of the poor. He said though the cover is not a panacea to farmers woes and involves many challenges.
—oyuke@standardmedia.co.ke
