VisionFund International Offers Climate Insurance Initiative for African, Asian Farmers

More than 690,000 families totaling up to four million people living in six low-income countries stand to benefit from a new climate insurance programme launched by VisionFund International, World Vision’s microfinance arm, and Global Parametrics, a new venture funded by the UK’s Department for International Development (DFID) and by the InsuResilience Investment Fund, set up by German development bank KfW and managed by Swiss-based impact investment manager BlueOrchard Finance.

Financing for the initial preparation and assessment required to implement the programme came from the Rockefeller Foundation and FMO, the Dutch development bank.

The programme known as the African and Asian Resilience in Disaster Insurance Scheme (ARDIS) is thought to be the world’s largest non-governmental climate insurance programme.

ARDIS will increase access to finance and provide post-disaster recovery lending to rural families and smallholder farmers who live below the poverty line and participate in VisionFund’s microfinance network. In its first year, ARDIS protection will be provided to VisionFund’s clients in Kenya, Malawi, Mali, Zambia, Cambodia, and Myanmar, of which around 80% are women.

This programme will effectively meet 1% of the G7 goal to increase access for up to 400 million uninsured people in developing countries to insurance products that protect against climate risk.

The ARDIS programme allows beneficiaries to receive swift access to much-needed credit required by farmers and small businesses after a climate shock. Recovery lending, essentially small loans with special terms, is provided through VisionFund’s microfinance institutions.

Such loans are disbursed immediately during and after disasters to help clients maintain or restart economic activities, complementing relief aid which is required for urgent survival needs in disaster situations.

Fast recovery lending to the client is enabled by the provision of liquidity to the microfinance institution in order to bolster its resources to cope with increased demand. Global Parametrics’ advanced climate-based data modelling verifies the climate event and triggers access to both contingent liquidity and risk capital by VisionFund’s microfinance institutions.

This injection of funds to the microfinance institutions restores their balance sheets, thus ensuring business continuity or enhancement of operations and services despite the common disruptions created by such calamities.

For example, typically in disasters when clients cannot repay loans and there is higher demand for lending, microfinance institutions suffer a reduction in the amount of capital they hold and are therefore required to curtail their lending.

The contingent liquidity for ARDIS is provided by the InsuResilience Investment Fund which is managed by impact investment specialist, BlueOrchard Finance, and backed by KfW on behalf of BMZ, the German Federal Ministry for Economic Cooperation and Development.

Risk capital is provided through the Natural Disaster Fund that is managed by Global Parametrics and currently funded by the British government via DfID. The structure offers an affordable and sustainable system for disaster recovery lending at costs of approximately half a percent of loan portfolio value per annum payable by the microfinance institution.

Michael Mithika, President and CEO of VisionFund International, said: “ARDIS uses an innovative financing structure making recovery lending scalable. This scalability means greater opportunities for more people to access emergency finance to restart businesses and restore incomes. We’ve already seen the benefits of recovery lending initiatives in sub-Saharan Africa in 2016/2017 which were supported by a £2 million returnable grant from DfID. We are excited about rolling this out on a wider scale.”

Jerry Skees, Chief Strategy Officer and Director of Global Parametrics, said: “We are thrilled to have worked jointly with VisionFund to develop this innovative programme. Together, we have the potential to meet ambitious social goals that improve financial inclusion, facilitate recovery lending, and build resiliency for communities. The adoption of ARDIS also assists microfinance institutions to protect their exposure to climate risk, ensure continuity of services, and continue business growth. The closing of this transaction is a major milestone as we build market-changing risk models and offer solutions to communities needing them most. We plan to repeat this type of offering with other firms serving the poor and vulnerable in emerging markets.”

Stefan Hirche, Chairman of the Board of the InsuResilience Investment Fund, said: “African and Asian countries are highly vulnerable to the effects of climate change and natural catastrophes. We are looking forward to partnering with VisionFund International and Global Parametrics to reduce the vulnerability of small businesses and low-income households in these regions and to contribute to achieving the G7 goal to insure four million vulnerable people.”

Financing for the initial preparation and assessment required to implement ARDIS came from the InsuResilience Investment Fund, DfID, Asian Development Bank, the Rockefeller Foundation, and with focused support to launch the program provided by the Dutch development bank FMO.

FMO’s contribution was provided by the MASSIF fund, which is managed by FMO on behalf of the Dutch government. MASSIF supports small businesses and micro-entrepreneurs in emerging markets by providing resources to financial intermediaries.

MASSIF supports innovations in inclusive business, such as ARDIS, targeting households at the base of the pyramid which are often situated in rural areas.

Michael Mithika concluded: “ARDIS consolidates VisionFund International’s leadership in the provision of on-the-ground agricultural finance. This is the first step for VisionFund in the use of climate science and Financial Disaster Risk Management tools to create extremely low cost climate protection. We are already working on additional countries, risks, features and services with Global Parametrics to build on ARDIS.”

Learn more at www.visionfund.org.

Leave a Reply

Africa/Middle East

Zimbabwe-flag
Africa/Middle East

Zimbabwe’s New Government Pushes to Strengthen Agriculture

The new government in Zimbabwe has unveiled new plans, including a land tenure review plan and agricultural crop subsidies to

Pyrethrum flowers
Africa/Middle East

Pyrethrum Comeback Afoot in East Africa

Governments in East Africa are renewing efforts to revive the ailing pyrethrum subsector in order to bring back the bloom

Africa/Middle East

Eurofins Adds Field Base and Two Satellite Bases in Morocco

New for 2018 is EAS Groups field base in Morocco – from the main facility in Meknes, based in the

Africa/Middle East

Bayer Closes Monsanto Acquisition

Bayer successfully completed the acquisition of Monsanto on Thursday. Shares in the U.S. company will no longer be traded on

Africa/Middle East

Bayer Plans Closing of Monsanto Acquisition on June 7

Bayer plans to complete the acquisition of Monsanto on June 7, following the receipt of all required approvals from regulatory

pheromone-based-innovation-combats-tuta-absoluta-in-tomatoes
Africa/Middle East

Affinity in East Africa: Marrone Bio Innovations Finds Harmonious Partner in Kenya Biologics

Farmers in East Africa are set to benefit from a wide range of zero-residue biopesticides that will help to increase

Africa/Middle East

Zimbabwe’s New Government Pushes to Strengthen Agriculture

With Mugabe out, the push for increased agricultural production by the new government has opened new business opportunities for planting seed material suppliers and agchem manufacturers.

Africa/Middle East

Zambia’s AGCO Enters Retail Finance Partnership

The new partnership between AGCO, its national distributor BHBW Zambia Limited and the Zambia National Commercial Bank Plc (Zanaco) will provide retail financial solutions for farmers purchasing machinery.

Fall-Armyworm-Photo-CABI
Africa/Middle East

Fall Armyworm a Serious Threat to Sub-Sarahan African Food Security in 2018

Once considered a pest plaguing only North and South America, the fall armyworm (FAW) arrived in Africa in force in

Africa/Middle East

Staphyt Opens Experimental Station in Morocco

Agrosciences and regulatory CRO Staphyt announced it opened its first phytosanitary experimental station in Meknes, Morocco in March.

Coffee-Farmer
Africa/Middle East

AgTech Startup Wefarm Secures New Financing Round

Wefarm, the world’s largest farmer-to-farmer digital network, has secured $5 million in additional seed funding, led by Silicon-Valley based True

Fall-Armyworm-corn-Kenya
Africa/Middle East

Sub-Saharan Africa: Time for a Paradigm Shift to Sustainable Farming Practices

Farming in sub-Saharan Africa (SSA) has remained fairly conventional over the years and involves intensive use of synthetic chemicals and

Africa/Middle East

Bancella Expands African Footprint

Bancella Ltd., headquartered in Mauritius, has taken another step in growing the footprint in Africa by taking what is described

Wilson-Kyalo-Chairman-of-Wilson-Kyalo-Chairman-of-the-LEDCA-alliance-has-built-his-dairy-farm-from-one-cow-to-100-cows-over-40-years
Africa/Middle East

Kenya Dairy Industry Sheds Light on Market Challenges, Opportunities

In December, I had the privilege to serve as a volunteer consultant with the USAID Farmer-to-Farmer (F2F) program in Kenya.

Africa-Kenya
Africa/Middle East

Eastern African Nations Move to Harmonize Fertilizer Regulations

Eastern Africa countries are working to harmonize the region’s fertilizer market, a move that could improve not only demand for

wheat-field
Africa/Middle East

Changing the Narrative: It’s Not Just About Yield

For years now when someone outside the industry asks what I do, I give them the “elevator speech,” the 30-second

maize-crop-Africa
Africa/Middle East

Counterfeits Disrupt Uganda’s Agrichemicals Market

The outbreak of the Fall Armyworm (Spodoptera frugiperda) in East Africa in late 2016, particularly in landlocked Uganda, and the

BRANDT-Tunisia-Ag
Africa/Middle East

BRANDT Expands Relationship with Solagri Tunisia

BRANDT, a leading manufacturer of specialty products for the agriculture market, has signed an exclusive distribution agreement with Solagri Tunisia

Sanjay Sethi
Africa/Middle East

Sanjay Sethi, Phoenix Group Honored with Sustainable Initiatives Award

During the recently held Meet the Farmers Conference 2017 at the Waldorf Astoria, Palm Jumeirah in Dubai, Sanjay Sethi, Director

Latest News

Americas

CropLife America Names Corteva’s Wasson as Chair

Wasson will hold the position for two years and use her diverse background to help guide the association, working with newly hired President and CEO Chris Novak.

Events

Agricultural Robotics Take Center Stage at FIRA 2018

The future of agricultural innovation will continue to rely heavily on collaboration and exchange of ideas among all industry players.

Agrichemicals

What to Do If You Have Products Subject to New U.S. Tariffs

The new retaliation lists hit almost every product that the Chinese import from the U.S.

Industry News

China: We’ll Retaliate Against New U.S. Tariffs

China said on Tuesday that it had no choice but to retaliate against new U.S. trade tariffs, raising the risk

Plant Health

Soil Holds the Secret to Mitigating Climate Change

Food production doesn’t have to be a victim of climate change. New research from Michigan State University suggests that crop