Ethiopia Set to Launch Weather Index Based Crop Insurance
Ethiopia, November, 19 2015 -
Using the weather data that will be provided by the National Meteorology Agency, Kifiya, the technology company that has been engaged in micro-finance and tailored rural financial solutions, will be providing the micro-insurance platform.
The government of Ethiopia is set to introduce weather index based crop insurance aiming to rescue smallholder farmers from unpredictable weather that damages their crops.
Experts from various relevant government institutions, private sector and representatives from regional states met last week in Adama city of Oromia Region to discuss on how the country will have its first effective weather index based crop insurance.
Speaking at the meeting Yewondwossen Eteffa, CEO of Ethiopian Insurance Corporation (EIC) stressed the need of strengthening and diversifying insurance services to strengthen the financial sector of Ethiopia.
He also pointed out the works that have been done so far to come up with an improved and innovative insurance coverage that is suitable for the current Ethiopian context which includes working with Public Financial Enterprises Agency (PFEA) to identify the roles and responsibilities of the concerned parties.
The meeting is a continuation of a series of its kind conducted in order to create awareness among the key players regarding the service and discussed on ways to take the crop insurance initiative one step further towards implementation.
When implemented, this new insurance product will enable smallholder farmers to insure their loans and investments to purchase and use agricultural inputs. The insurance service is expected to reach over 200,000 farmers at the initial period and millions of small holder farmers in the coming strategic periods.
Pilot Index-Based Livestock Insurance (IBLI) project in Kenya and Ethiopia demonstrates innovative approaches to insuring poor nomadic pastoralists in challenging circumstances, according to the 2015 global report, 'Scaling up index insurance for smallholder farmers: Recent evidence and insights', by the Consultative Group for International Agricultural Research (CGIAR).
Last week's meeting was organized by the Public Financial Enterprise Agency (PFEA), Agricultural Transformation Agency (ATA), Ethiopian Insurance Corporation (EIC), National Meteorology Agency (NMA) and Kifiya Financial Technology PLC (KFT), which is known for introducing an information technology based bill collection in Addis Ababa through its channel, Lehulu, in a public private partnership with government institutions.
“Kifiya is working in helping insurance companies develop client centered microinsurance product that can be implemented at scale at low cost by providing modern and innovative technology platform,” said Megerssa Miressa, Director of Microinsurance Program at KFT.
As the county moves forward in introducing its first weather index based crop insurance, the state-owned EIC will be primarily engaged as the insurance underwriter. While PFEA and ATA will work jointly in creating an enabling atmosphere.