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Grantee
PlaNet Guarantee (PG), created in 2007, is a subsidiary of the PlaNet Finance Group dedicated to the promotion and development of microinsurance systems. PG is an insurance and reinsurance broker that offers innovative products responding to the needs and the financial capacities of microentrepreneurs and their families. It has access, through PlaNet Finance, to a network of 315 MFIs and currently covers more than 100 000 microentrepreneurs in Egypt, Cameroun, Senegal, Sri Lanka, and Madagascar.
Project Summary
- Project name: Feasibility Study on Index-based insurance for Cotton producers
- Project start date: February 2009
- Duration: 6 months
- Country: Mali
Beneficiaries
The target group is the cotton growers of Mali who will have a tool to protect themselves against the consequences of a natural disaster event.
Project Description
Western African countries are exposed to different kinds of weather hazards that dramatically affect crops. In case of a drought or flooding, low-income farmers lose a considerable part of their income. The project proposes to protect cotton farmers, their assets, and their crops by building up an insurance programme based on a weather index.
The Feasibility Study has five specific objectives to support the design and implementation of the scheme:
- Assess the possibility to build a weather index
- Determine the typology of the demand
- Estimate the price of the product
- Evaluate the IT support
- Analyze the regulatory framework
Key Challenges
Quality and availability of the data: To build the index and price the product, PG needs to have access to 30 years of reliable historical data. A solid relationship with public agencies, in charge of meteorological and climate-related issues, is essential as these data may be classified as confidential.
Quality and availability of the automated weather stations: The reliability of existing weather stations and their costs need to be assessed to confirm that reliable and objective information can be delivered on a sustainable basis.
Regulatory framework: The CIMA regulates insurance activities in Africa but does not include specific rules applying to index insurance.
Learning Agenda
- What is a cost-effective methodology to conduct a feasibility study on index insurance?
- How to develop index insurance and what is the role of the broker?
Quote
"It is indispensible for the microfinance sector to offer products and services which protect
the fragile financial equilibrium of the poor. PlaNet Guarantee should be able to reach 7 million
micro-entrepreneurs in 20 countries."
Jaques Attali, Chairmain of PlaNet Guarantee's Conseil de surveillance
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More information on the project
Website of the grantee:
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