APA Insurance has received a Ksh252 million ($2.5 million) funding from the MasterCard Foundation Fund for Rural Prosperity to increase incomes and well-being of smallholder farmers in Kenya through targeted micro-insurance products. APA is the first insurance company to receive such funding in Kenya.
The funding, which was announced today at a ceremony in Accra Ghana, will go towards enhancing resilience, improving productivity, enhancing innovation, profitability and growth of rural and poor households in Kenya through increased access to financial services by rural populations who are predominantly smallholder farmers.
“This grant is a huge boost to our effort to create sustainable risk solutions and bring financial inclusion to a very important section of our population, the smallholder farmers. It will enable us to support them, to create and protect their hard work and help with their wealth and livelihoods,” said Mr Ashok Shah, the Chief Executive Officer of the Apollo Group.
The project aims at developing and offering bundled insurance products to cushion rural populations against weather and other natural related risks, health related covers, and life insurance to enhance their livelihoods.
Working with financial institutions, it will also develop products offering loans to smallholder farmers and pastoralists. APA will collaborate with other insurance companies and insurance intermediaries to rapidly develop and nurture this market and significantly increase insurance penetration in the East African region.
The firm will also, together with value chain partners, provide solutions to the communities to address risks across the value chain, and ensure service delivery to the rural communities leading to better productivity and incomes.
APA’s expansion strategy will use its wide office network – currently with 32 offices across the country – to sell the products. The grant follows APA’s track record of insurance products attuned to the needs of small scale farmers -including the Area Yield Index Crop Insurance, Index-based Weather Insurance and Livestock Insurance.
The Area Yield Index Insurance is a multi-peril micro-insurance product rolled out together with the Government of Kenya and other insurers. It covers smallholder maize and wheat farmers against poor yields due to poor weather and natural catastrophes.
Index-based Weather Insurance compensates farmers for crop damage as a result of deficit or excesses in weather conditions such as temperature, sunlight, wind speed or rainfall resulting in losses during the length of the crop growth cycle up to physiological maturity.
Livestock Insurance compensates livestock keepers upon accidental death of their domesticated animal of economic value through accidents, illness, or complications while giving birth. Farmers are also compensated for the theft of their animals.