Financial institutions encouraged to develop agricultural insurance

In an effort to alleviate poverty in rural areas, banks are required to accept microinsurance policies in exchange for loans allocated to farmers. The “Kilimo Salama Agriculture Initiative" institute is striving to make banks review their procedures and accept this kind of policy. This move would allow to face the shortage of financial products authorized in exchange for the award of microcredits.

Microinsurance is targeting low-income people, that is to say, those whose income is set between 1 and 4 USD per day. Few insurers are marketing microinsurance covers. The taxes applied are considered too high and seem to stand as a constraint for farmers who have limited resources.