Colombo, Sri Lanka, April 25, 2012—IFC,
a member of the World Bank Group, is working with micro-insurance company
SANASA Insurance to develop flexible, affordable, weather-based agricultural
insurance products in Sri Lanka to minimize the impact of crop losses due
to floods or droughts.
IFC is helping SANASA Insurance expand
access to insurance for up to 15,000 small farmers by offering protection
against weather-related risks and natural disasters for their food crops.
The project will also raise awareness among 50,000 farmers
on the availability and benefits of these index-based insurance products.
“IFC is an invaluable partner in our
commitment to empower the Sri Lankan farmer through flexible and affordable
insurance to help mitigate weather-related risks,” said Dr P. A.
Kiriwandeniya, founder of the SANASA movement.
Index-based insurance products pay out
benefits calculated using a pre-assigned value for losses arising from
weather or catastrophic events. Such products eliminate the need for insurance
companies to individually verify claims, reducing transaction costs and
making it easier and faster for products and payouts to be offered to rural
“These insurance products, designed
in collaboration with SANASA, will improve the livelihoods of small farmers
in Sri Lanka by reducing the impact of adverse weather conditions,” said
Adam Sack, IFC Country Manager for Sri Lanka and Maldives.
IFC established its Global Index Insurance
Facility in 2009 to assist the development of index-based insurance for
natural disasters and weather risks in developing countries, particularly
in agricultural communities where insurance is rarely available. The GIIF
Global Trust Fund is also supported by Japan’s Ministry of Finance, with
an initial grant of $2 million, and by the Dutch Ministry of Foreign Affairs,
which provided $500,000 to establish the facility.
Sri Lanka is a priority country for
IFC. IFC’s committed portfolio of $200 million in Sri Lanka covers projects
across a range of sectors, including infrastructure, tourism, renewable
energy, finance, and health care. IFC also provides advisory services to
promote sustainable growth among small and medium enterprises by facilitating
access to finance and offering capacity-building and training opportunities.