International Finance Corporation increases reach of index insurance for smallholder farmers in Zambia
International Finance Corporation, a member of the World Bank Group, has unveiled a grant extension to Mayfair Insurance Company Zambia Limited, to support Mayfair in scaling up its weather-based index insurance product line in Zambia.
The additional performance-based grant, awarded through the Global Index Insurance Facility, is expected to help Mayfair reach an additional 300,000 farmers by December 2019.
Smallholder farmers in Zambia are vulnerable to weather-related shocks such as drought, flooding, and irregular rainfall. Insurance can be a good risk management tool for these farmers, but the traditional insurance market largely fails to meet their demand for affordable insurance.
Index insurance provides an innovative and more efficient solution for them to protect their crops against losses and encourage investment.
The Zambian government has recently awarded Mayfair a contract to offer weather-based index insurance to farmers who benefit from government input subsidies.
The additional funding provided through the IFC grant will enable Mayfair to successfully carry out the government contract and reach a total of 400,000 farmers in Zambia, including those reached through the grant extension.
Alejandro Alvarez de la Campa, Practice Manager for the World Bank Group’s Finance, Competitiveness, and Innovation Global Practice, Africa region, said, “We anticipate that in the medium to long term, over one million smallholder farmers in Zambia will benefit from the combined input subsidy and insurance package offered by the government and Mayfair. This will improve the farmers’ resilience to weather-related shocks and improve sustainable farming opportunities in Zambia.”
The grant agreement provides funding by the Netherlands through IFC’s Global Index Insurance Facility, and ends in December 2019.