Working together on
microfinance and microinsurance
microfinance and microinsurance
"It was written in the stars: sooner or later I would be active at BRS," says Arnold Rahier. Arnold worked for Boerenbond for a long time and is now an agricultural and horticultural insurance specialist at KBC. Previously, he organized trips for Belgian farmers to projects in the South and came into contact with microfinance there. The perfect KBC volunteer for BRS!
"Lieven Keppens of the BRS Institute contacted me with some questions about crop insurance, an industry that is still in its infancy both here and in the South. Specifically, it was about an insurance project at the Ethiopian microfinance organization Wasasa. To better understand the problem, I left for Ethiopia with Lieven and two other volunteers.
Wasasa started microinsurance two years ago. Out of their potential of 20 000 farmers, only 400 to 500 customers have taken out such crop insurance. So a small group, and it's really no different in Belgium. Moreover, Wasasa's farmers have to finance everything themselves, with substantial premiums, while in Flanders the government intervenes because the risk is difficult to insure.
To advise on crop insurance, you first need to know if all the technical agricultural parameters are in order. We want to get a better idea of that first. Has the soil been worked correctly? Is the seed of good quality? Is harvesting done efficiently? Only when you know that agrotechnically everything is optimal for the harvest to succeed does it make sense to insure that harvest. At another MFI we visited, they were completely imbued with that principle. Optimizing agriculture takes priority over insuring crops.
And then there are so many other factors at play: the war that is never far away, a population explosion that leads to ever-smaller plots of land, climate change that is also having a major impact in Ethiopia.
The limited success of the past two years led management to consider discontinuing their insurance offerings. Personally, I think that decision is premature. Unlike microfinance, with insurance you don't have an immediate measurable result. You have to give this a minimum of five years before drawing any conclusions. So my advice was to continue for now.
In addition, I advised them not to offer their agricultural insurance throughout the year. That way, you avoid farmers taking it up quickly when the season is dry.
Now it's just a matter of waiting. A seed has been planted and must grow. Will it become a big tree? Or will it turn out to be an annual fruit and stop there? I suspect they will keep their insurance for now. But that's for them to decide.
This is also part of BRS's approach: as volunteers, we share our experience, but the partners choose what to do with it. The combination of professionalism without pedantry pleasantly surprised me. This ties in with my own aim to not only approach the situation from a global view, but to put myself in the shoes of the people there as much as possible. I found it a very special experience. And I am very curious about what comes next!"
