Thursday, 21 June 2012

FARM INSURANCE PROGRAM KILIMO SALAMA WINS FINANCIAL TIMES SUSTAINABLE FINANCE AWARD.


By Eric Akasa 
 Kilimo Salama last Friday won the Financial Times’ award for Technology in Sustainable Finance in London, recognizing their groundbreaking work to provide smallholder farmers with access to insurance cover using innovative technology and approaches.

The FT’s Award for Technology in Sustainable Finance recognizes organizations and initiatives that are addressing the scarcity of essential goods and services across society and those that demonstrate leadership and innovation in addressing environmental, social and corporate governance considerations in business.

Kilimo Salama translated to mean ‘safe farming’ 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,” says Marco Ferroni, Executive Director of the Syngenta Foundation for Sustainable Agriculture.
Kilimo Salama was designed based on the learning of a pilot in Laikipia district where several hundred maize farmers insured their farm inputs against drought in the long rains season of 2009. Following the drought that season, both weather stations showed that there was a payout and all farmers were compensated depending on the extent of the drought as measured at their weather station (a 30 percent and 80 percent payout, respectively). The pilot was the first of its kind in Kenya.
Kilimo Salama features many elements like the mobile phone registry and payment system and distribution through rural retailers that are micro-insurance firsts.
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. Kilimo Salama has just completed one of the largest index insurance payouts ever experienced on the continent has insured nearly 64,000 farmers for the next season. They are currently making plans to expand to other countries in the region beginning with Rwanda.

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 awards were presented at a gala dinner in London attended by around 200 senior decision-makers in finance and sustainability. The event followed a one-day Sustainable Finance Conference organized by the Financial Times and IFC.


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