Kenyan insurer APA Insurance Ltd is the winner of the 10th European Microfinance Award. The recognition, which was presented to Apollo Group CEO Ashok Shah in Luxembourg, has a monetary value of $110,000 (about Ksh11 million).
Since 2006, Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, the European Microfinance Platform and the Inclusive Finance Network Luxembourg have been awarding a EUR 100,000 ($110,000) prize to the winner and, starting two years ago, EUR 10,000 ($ 1,100) to the two finalists.
The award ceremony was held at the European Investment Bank in Luxembourg, Paulette Lenert. APA Insurance Ltd won thanks to its index-based agriculture insurance covering yields and livestock, thus providing farmers with a safety net.
Magic of micro-insurance
An index-based cover is an innovative approach to insurance whereby payments are linked to easily measured environmental conditions known as an “index” (e.g. the level of rainfall, yields or vegetation levels as measured by satellite) directly connected to the loss of agricultural output.
When the index exceeds a particular threshold, farmers automatically receive compensation. In Kenya, where over 75% of farmers are smallholders vulnerable to the economic impacts of climate change, APA Insurance Ltd currently covers more than 350,000 families whose livelihoods are largely based on agriculture.
“I am extremely honoured to receive such an important award – the European Microfinance Award 2019,” said Ashok Shah, Apollo Group CEO. “This year’s Award couldn’t be timelier.”
He said extreme events – including drought, flooding, storms, fluctuating temperatures, and other climatic changes – are occurring with greater frequency and intensity, increasing risks to health, livelihoods, food security, water supply, economic growth and human rights.
“It is the poor in developing countries who feel the most impact of these climatic changes,” Mr Shah said.
Increasingly unpredictable weather conditions and climate change threaten the already precarious situations in developing countries.
Paulette Lenert, Luxembourg Minister for Cooperation and Humanitarian Affairs, who chaired the High Jury of the European Microfinance Award, noted that, “this year’s Award illustrates that inclusive finance has an essential role to play in strengthening the resilience of vulnerable communities to the effects of climate change, which threaten the livelihoods of disadvantaged communities, especially those relying on agriculture, forestry or fisheries.”
Dr Werner Hoyer, President of the European Investment Bank, said climate change is a threat for many nations and communities.
“How we combat and adapt will shape our future. The three finalists of the European Microfinance Award, and APA Insurance Ltd, in particular, are delivering innovative solutions for the financial sector to support vulnerable communities in tackling the effects of climate change,” Dr Hoyer said
Also, present at the European Microfinance Awards was Ambassador Joshua M. Mugodo, from the Embassy of the Republic of Kenya & Mission to European Union.
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