Microinsurance – Crop Insurance Made Easy. The Power of Mobile Payment

As we get to rounding up our coverage of Kenyan startup, we bring Kilimo Salama (“Safe Agriculture”) that has developed a very good way of helping farmers to invest in quality seeds and fertilizers. Simply, it offers insurance to farmers. And it does this through Mpesa that enables quick claims to crop loss. The opportunity for farmers is no matter what happens, they win. By examining weather reports to collaborate losses and using Mpesa to pay claims, this company is breaking the resistance that exists in farm insurance. A new era in micro-insurance is here with us.


For Kilimo Salama, it is simple. They install solar powered weather stations that collect data on pertinent weather conditions like rainfall and wind. Immediately a farmer files a claim that it did not get enough rainfall (or too much as the case may be)  and yield was low, it quickly pays out. This eliminates subjective bias and endless prove that low yield was related to weather. As payments are made in easy ways, farmers are spared all the troubles of insurance companies. No need to travel to town and put on ties. Just do the farming and agents will come to you and get the digitalized registration process done.


Good enough, they even subsidy the premium through their partners. For more about Kilimo Salama, read below :


Kilimo Salama is an insurance designed for Kenyan farmers so they may insure their farm inputs against drought and excess rain. The project, which is a partnership between Syngenta Foundation for Sustainable Agriculture, UAP Insurance, and telecoms operator Safaricom, will offer farmers who plant on as little as one acre insurance policies to shield them from significant financial losses when drought or excess rain are expected to wreak havoc on their harvests.


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.


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