Kenya’s APA Insurance Ltd wins the 10th European Microfinance Award in recognition of its response to “Strengthening Resilience to Climate Change”
APA Insurance Ltd (“APA”) is a Kenyan insurance company, providing index-based agriculture insurance to cover yields and livestock, providing farmers with a safety net. Index-based insurance is an innovative approach to insurance whereby payments are linked to easily measured environmental conditions known as an “Index” (e.g. the level of rainfall, yields or vegetation levels as measured by satellite) directly connected to the loss of agricultural output. When the Index exceeds a particular threshold, farmers automatically receive compensation. In Kenya, over 75% of farmers are smallholders and are especially vulnerable to the economic impact of climate change. APA covers more than 350,000 families throughout Kenya whose livelihoods are largely based on agriculture.
The contenders for the Award included banks, NGOs, cooperatives, insurers, networks and technical-service providers from around the world. The contenders cover various fields, including index insurance, agricultural practices, value chain development, nutrition, education, clean energy, disaster preparedness, and the use of the geodata and other technologies.
The Award illustrates that inclusive finance has an essential role to play in strengthening the resilience of vulnerable communities to the effects of climate change, which threaten the livelihoods of disadvantaged communities, especially those relying on agriculture, forestry or fisheries.
Climate change is an increasing threat to many nations and communities. The Award illuminates an area of the financial inclusion sector that will become more and more important in the near future, especially in developing countries where the effects of climate change may disproportionally affect communities.
The Luxembourg Directorate for Development Cooperation and Humanitarian Affairs, the European Microfinance Platform, and the Inclusive Finance Network Luxembourg awarded a EUR 100,000 prize to the winner and EUR 10,000 to the two finalists. The win for APA is further validation of its mission and model to deliver innovative financing solutions to support vulnerable communities in tackling the effects of climate change. And the award to a non-financial institution underscores the accelerating trend to provide more support to Financial Inclusion focused companies that provide services that extend beyond simple credit provision to the bottom of the pyramid.
Source: The European Microfinance Platform (e-MFP)