Nairobi, Kenya, February 5, 2014—IFC,
a member of the World Bank Group, signed two grant agreements, with a combined
value of $3.9 million, with the Syngenta Foundation for Sustainable Agriculture
to expand index-based insurance to small-scale farmers in Kenya, Rwanda
and Tanzania. Index-based weather insurance can protect against the adverse
effects of climate change and help to strengthen food security in rural
The grants were issued by the Global Index Insurance Facility,
a multi-donor trust fund financed by the European Union, Japan and the
Netherlands and implemented by IFC and the World Bank. It is estimated
that the project will bring index insurance to approximately one million
small-scale farmers within two years.
At a signing ceremony in Nairobi, smallholder farmer Reuben Biwot from
Kitale, Kenya, said, “The insurance has given me confidence. It has transformed
my attitude from subsistence farming to farming as a business. I am free
from the fear of failure.”
Reuben Biwot is one of 187,000 small-scale farmers in East Africa already
benefiting from index insurance provided by the Syngenta Foundation’s
agricultural index insurance initiative, Kilimo Salama.
Marco Ferroni, Executive Director of the Syngenta Foundation for Sustainable
Agriculture, said "The support from IFC and the EU has been instrumental
in the expansion of our index insurance program. This year, our team aims
to reach over 600,000 farmers, expanding the program to cover Tanzania
Much of the agricultural land in Kenya, Rwanda and Tanzania is rain fed
and certain regions are vulnerable to drought and erratic rain. Many smallholder
farmers limit their losses to extreme weather by making minimal investments
into their land, leading to reduced yields and continued food insecurity.
Traditional indemnity-based agricultural insurance has seen little success
due to high transaction costs and premiums. Index-based insurance, which
pays out benefits on the basis of weather data without costly field verification
of losses, is a more efficient risk management tool.
David Crush, IFC Manager for Access to Finance in Sub-Saharan Africa, said,
“Index insurance helps to strengthen the livelihoods of small-scale farmers,
which is one of the most important tasks in the quest to fight poverty
and foster inclusive and sustainable economic growth in Africa and elsewhere.”
A non-profit organization based in Switzerland, the Syngenta Foundation
for Sustainable Agriculture's mission is to create value for resource-poor
small farmers in developing countries through innovation in sustainable
agriculture and the activation of value chains. The SFSA's two-pronged
approach to improve livelihoods is raising agricultural productivity and
linking farmers to markets.
Launched in Africa in 2009, the Global Index Insurance Facility is a multi-donor
trust fund financed by the European Union, Japan and the Netherlands and
implemented by IFC and the World Bank. GIIF
supports the development and growth of local markets for indexed and catastrophic
insurance in developing countries, primarily in Sub-Saharan Africa, Latin
America and the Caribbean, South Asia and Southeast Asia. GIIF’s objective
is to expand the use of index insurance as a risk management tool in agriculture,
food security and disaster risk reduction.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in more than 100 countries, we use our capital, expertise,
and influence to help eliminate extreme poverty and promote shared prosperity.
In FY13, our investments climbed to an all-time high of nearly $25 billion,
leveraging the power of the private sector to create jobs and tackle the
world’s most pressing development challenges. For more information, visit