APA Insurance Receives Ksh 250 Million From The MasterCard Foundation Fund For Rural Prosperity In Kenya

APA Insurance has received a KSh252 million ($2.5 million) funding from the MasterCard Foundation Fund for Rural Prosperity to increase incomes and well-being of smallholder farmers in Kenya through targeted micro-insurance products.

The funding, which was in Accra, Ghana, will go towards enhancing resilience, improving productivity, enhancing innovation, profitability and growth of rural and poor households in Kenya through increased access to financial services by rural populations who are predominantly smallholder farmers.

“On behalf of the Board and Management of the Apollo Group, I wish to convey our sincere gratitude,” said Ashok Shah, the Chief Executive Officer of the Apollo Group.  “This grant is a huge boost to our

effort to create sustainable risk solutions and bring financial inclusion to a very important section of our population, the smallholder farmers.  It will enable us to support them, to create and protect their hard work and help with their wealth and livelihoods.

As a business, we have built a track record of doing this and will continue on this path.”

The project aims at developing and offering bundled insurance products to cushion rural populations against weather and other natural related risks, health related covers, and life insurance to enhance their livelihoods.  Working with financial institutions, it will also develop products offering loans to smallholder farmers and pastoralists.

APA will collaborate with other insurance companies and insurance intermediaries to rapidly develop and nurture this market and significantly increase insurance penetration in the East African region.  The firm will also, together with value chain partners, provide solutions to the communities to address risks across the value chain, and ensure service delivery to the rural communities leading to better productivity and incomes.

APA’s expansion strategy will use its wide office network – currently with 32 offices across the country — to sell the products.

The grant follows APA’s track record of insurance products attuned to the needs of small scale farmers — including the Area Yield Index Crop Insurance, Index-based Weather Insurance and Livestock Insurance.

The Area Yield Index Insurance is a multi-peril micro-insurance product rolled out together with the Government of Kenya and other insurers.  It covers smallholder maize and wheat farmers against poor yields due to poor weather and natural catastrophes.

Index-based Weather Insurance compensates farmers for crop damage as a result of deficit or excesses in weather conditions such as temperature, sunlight, wind speed or rainfall resulting in losses during the length of the crop growth cycle up to physiological maturity.

Livestock Insurance compensates livestock keepers upon accidental death of their domesticated animal of economic value through accidents, illness, or complications while giving birth. Farmers are also compensated for the theft of their animals.

Other beneficiaries from East Africa

The MasterCard Foundation has released more than USD 10.6 Million to companies that have evolved innovative strategies to alleviate poverty by increasing access to financial services for farmers particularly in remote communities in Africa.

The companies are APA Insurance Ltd, Finance Africa Ltd/Equitel, M-KOPA LLC, Musonic Kenya Ltd and Olam Uganda Ltd.

The MasterCard Foundation announced these companies as the winners of the 2015 scaling competition when it launched the 2016 edition on the side line of the ongoing 12th CAADP meeting in Accra.

“Finserve Africa Ltd./Equitel is offering one of the first fully digital models for rural finance, while M-Kopa is leveraging lessons learnt and credit histories from their core product- solar energy kits- to extend agriculture finance to smallholder customers. APA is expanding a tested model for de-risking agriculture and livestock through index insurance, while Olam is digitising value chain payments and broader financial offerings for smallholder coffee suppliers. Musoni is expanding a nearly branchless microfinance institution using demand side insights to offer a unique suite of products,” the MasterCard Foundation said.