Keeping the Little Guy Safe: Small Farmers’ Insurance in Zimbabwe
Less than 10 years ago there was little to no financial safety for African farmers. Planters, ranchers, herders and nomads were all subject to changing weather cycles and droughts, which could be detrimental to harvests.

If and when disaster struck, farmers and their families often had no access to bank accounts or emergency loans, and insurance was unfathomably expensive — if available at all. Then came the cell phone, and all of that changed.

Africa has seen one of the largest cell phone booms in the world. As soon as mobile devices became affordable, usage across the continent skyrocketed. Rather than trying to work within the poorly developed and expensive banking system, many Africans turned to mobile financial markets to apply for loans and open accounts.

Millions, (12 percent of mobile users) now conduct financial operations using mobile money accounts. This has spurred a huge increase in economic access, thus reducing poverty slowly but surely.

Though they now had bank accounts for emergency funds and access to loans for seeds and equipment, farmers still faced uncertain futures at the hands of Mother Nature. The increased effects of climate change did not settle any anxieties, either.

In Zimbabwe, however, small farmers have finally caught a break with the help of EcoFarmer, a mobile service that provides instant, low-cost crop insurance against droughts and floods.

Seventy percent of Zimbabwe’s economy is still agrarian-based, and the country has only recently begun to recover from a devastating recession. The need for economic stability and protection is crucial.

Users of the service pay the equivalent of 8 cents per day for 125 days and are then guaranteed protection for a harvest. The guarantee is about $100 for every 10 kilograms of seed planted.

The service makes it affordable to even some of the poorest in the world to be insured. Insurance will give these farmers and their families a safety net so that, at the very least, they will not sink into even further poverty.

EcoFarmer also serves as an educational tool to farmers who, until recently, have relied on out-of-date practices and information. Users receive weather updates and forecasts in addition to farming tips, and perhaps most importantly, current market prices for common crops.

With this information, farmers can increase their yields and thus, their incomes. Mobile money services are changing the way the world does business, and in Africa, they are spurring huge amounts of economic growth. With increased mobile money access and services like EcoFarmer, the goal of eliminating poverty once and for all is becoming an ever more feasible reality.

Joe Kitaj

Sources: Wired, Econet
Photo: Flickr