African Farmers Insure Crops and Recieve Payments Via Cell Phones
Thursday, March 10th, 2011Yet another use of cell phones in Africa has come to my attention. Like other novel, African uses of cell technology (checking the validity of medicines, receiving crop price information, and banking), this one offers real help at the grassroots level on the continent. Farmers in Kenya while purchasing seed and fertilizer for their crops can, at the same time, use their cell phones to scan a bar code on the products to purchase weather related crop failure insurance. They receive weather advisories on the same devises. Ultimately, if the rains are not sufficient or abundantly destructive they will receive payouts on those devises.
There are no forms to fill out nor claims to file. The entire system is automated on their cell phones. This insurance scheme is the result of a partnership between UAP Insurance Company of Kenya, Safaricom Ltd., and two crop input providers (MEA Fertilizers and Syngenta Foundation for Sustainable Agriculture seed supplier).
The name of this Kenya insurance scheme is called Kilimo Salama (’safe farmering’ in Swahili). Farmers can insure the seed and/or fertilizer for as little as one acre. The cost to the farmer is five percent of the purchase price of the products. That five percent is matched by the product producer, MEA or Snygenta. When a local weather station detects that there has been either too much or insufficent rain a payout is automatically triggered to cover the seed or fertilizer. The scheme has gained momentum this year because of the payouts it made in 2o1o to farmers in effected areas. The farmers now have confidence that their investment in the insurance will actually result in a payout.
View this video describing the scheme and a payout last year:
Of course, as is the case with all forms of insurance, premiums could increase if multiple, major payouts are made due to chronic weather problems. Yet, the ease of purchase and payout will most likely continue to attract greater numbers of Kenya’s farmers. The success of the Kilimo Salama scheme will surely spawn similar coverage in other African countries.
Africans used to be continually lag far behind the rest of the world in the implementation of technology, but they are quickly becoming the trend setters when it comes to the use of cell phone and mobile media technology. More power to them!
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