Fatou Assah, Programme Coordinator at the Financial and Private Sector Development Department of the World Bank, is in charge of the Global Index Insurance Facility (GIIF). This trust fund, which aims to promote index insurance in ACP countries, has been operational since 2009 and received €24.5 million in initial funding from the European Commission.
What is GIIF’s role?
GIIF, a programme co-managed by the World Bank and the International Finance Corporation, intervenes at all levels of the insurance chain. The first prerequisite for designing an index insurance product is to have access to both meteorological and agricultural data for each speculation. We are strengthening the capacity of national meteorological agencies to overcome the poor quality of these data. We also work with ministries of agriculture and finance. With respect to insurance packages, we collaborate with insurance companies on technical product development, pricing, access to reinsurance and setting up distribution channels. In this setting, we wish to promote group contracts with cooperatives and develop relationships with banks and microfinance institutions. We have found that linking insurance with credit substantially broadens the scope of coverage for farmers, whose initial requirement is to purchase inputs - insurance helps them to secure credit. Capacity building is an important part of our work. Finally, we are also involved in regulatory and legal aspects.
What has been achieved after 2 years of activity?
In terms of coverage, about 100,000 smallholder farmers are presently insured in six African countries, i.e. Burkina Faso, Kenya, Mali, Mozambique, Rwanda and Senegal, which is considerable. Ten thousand of these farmers have already received compensation. Concerning regulation, we attended the Inter-African Conference on Insurance Markets, which covers 14 countries in the CFA Franc Zone, to create code 7 on the promotion and regulation of agricultural index microinsurance and insurance. The World Bank is currently working with the Dominican Republic, Haiti, Jamaica, Kenya, Nigeria and Uganda to help them develop similar laws.
What are your goals for the next 2 years?
We would like to have 1 million farmers insured in around 15 countries and to be sure that the index insurance market will be self-sufficient when GIIF ends in 2015.
Agricultural insurance is, however, heavily subsidised in developed and major emerging countries?
All developed countries have realised that without subsidies agricultural insurance is quite hard to sell. For ACP countries, the aim is to set up sustainable subsidisation mechanisms funded by governments and donors.
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