With the iFarm App farmers in Sri Lanka can insure bank loans taken for agricultural purposes. This indemnity insurance scheme from SANASA is made available on the on the recently launched iFarm App. A collaboration between SANASA General Insurance Company Ltd and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. iFarm is a simple and secure online insurance platform that offers a host of insurance products to support the local farming community.
The indemnity insurance scheme is designed so that farmers are able to cover the basic cost of farming to the level that it matches their income in an ordinary year. The key principle of the policy being to cover the cost of production limited to agreed levels of the sum insured of particular crop or livestock in case of loss or damage.
The indemnity insurance offers valuable protection to small and medium scale farmers, who are particularly vulnerable to the effects of climate change and unpredictable weather patterns. Weather shocks, which are unusual and often unexpected meteorological events, have a severe impact on the livelihoods of the farming community. Droughts, floods, animal attacks, pest, diseases and other such occurrences can put farmers and their families in a dire situation, battling many difficulties. Climate change has increased the frequency of these weather shocks, causing the farming community to become even more vulnerable. The latest efforts by SANASA Insurance to bundle agricultural loans with insurance will be a huge boost in protecting the local farmers from the mentioned risks.
The protection afforded by agricultural loans bundled with insurance should provide farmers with much-needed confidence in continuing their farming activities with limited risk. Third-party capital is essential in obtaining new farming equipment and incorporating new agricultural technology. With this new safety net for their loans, farmers can avail themselves of the financial means that they need to advance their methods of cultivation and so increase productivity.
In addition to insurance which are obtained against farm lands, crops taken for farming activities, iFarm offers a range of other insurance products and services to the farming community. One of which is weather index-based insurance that is a sustainable and fair market mechanism to transfer weather risk. Weather index, allows to automatically determine payouts after verifying ground based weather stations or satellites thereby eliminating the time spent on assessing damage, it also removes the possibility of potential disagreements, thus ensuring farmers receive a just compensation with minimum hassle. The indemnity insurance policy is a general crop insurance scheme that covers 35 different crops, including vegetables, field crops, plantation crops, cash crops and spices.
Applying for these insurance products is simple and swift. All farmers need to do is to download the iFarm app from Google Play Store, fill in their details and submit. If further assistance is needed a representative from SANASA Insurance will then visit them to help complete the application process. There are multiple options for payment, including bank deposit, mobile money and credit card.
“The agricultural loans protection insurance policy is a noteworthy addition to iFarm. This creates variety in the options available to farmers, while also providing further security for them. Many banks are wary of offering loans to farmers due to the uncertainty created by climate change, other inherit risks and this risk will be mitigated through this product. Farmers will be offered the option of insuring loans taken for farming purposes and marks another important step in our commitment to meeting the diverse requirements of the farming community.”
GIZ and SANASA say they plan to continue improving the app in order further assist local farmers. Their aim is to make it as easy and hassle-free for farmers to obtain insurance and to provide products that are tailored to the farmers’ specific needs.