Our impact, their voices

Microinsurance saves the day for cocoa farmers

An ILO partnership with a major cocoa buyer and an insurance company saved the day for a family of cocoa farmers. Their story shows the difference microinsurance can make for some of the most vulnerable people.

Feature | 19 July 2019
© Nestlé
DIVO, Côte d’Ivoire (ILO News) – When his father fell ill Ivorian cocoa farmer Kan Joel N'Guessan thought he would lose just about everything he and his family had worked for. The medical bills piled up.

He borrowed money from a neighbour. But, when his father passed away a few months later, he was saddled with further bills, paying for the funeral.

Unable to repay the loan, he was about to give up part of his cocoa plantation when he received some good news; his father had taken out life insurance – through the cocoa farmers’ cooperative – which would cover the debts, with some money left over for household expenses.

N'Guessan had not been aware his father had been insured. But staff from the farmers’ cooperative gave him the information he needed, helped him make a claim and get the money quickly.

Cocoa farmers like N’Guessan face many risks. Ninety per cent of the 900,000 cocoa farmers in Côte d’Ivoire – the world’s largest cocoa producer – are smallholders who own less than five hectares of land and have limited access to formal financial services.

Their income is highly dependent on the success of the harvest, which is easily threatened by changes in the climate as well as fluctuating prices. In 2017, for example, international cocoa prices fell sharply, following bumper crops.

Cocoa farmers’ livelihoods are also threatened by day-to-day risks such as illness or the death of a family member. Struggling to manage these risks to both their households and their farms, the farmers often turn to informal loans, which come with interest rates of up to 100 per cent for a loan of just a few months.

That’s why the ILO’s Impact Insurance Facility partnered with Barry Callebaut, a leading manufacturer of chocolate and cocoa products, and the pan-African insurance company SUNU, to offer small cocoa farmers affordable life insurance and productivity loans as a package. The loans give them access to the materials they need, as well as, training, a savings account, a mobile wallet and peer-coaching. It was through this kind of financial services package that N’Guessan’s father had obtained insurance.

The ILO is now reaching out to new partners to replicate and scale up the initiative. Insurance companies and others in Côte d’Ivoire are working with the ILO to make additional insurance cover available to farmers, reducing their dependence on expensive, emergency loans and preventing them from being forced to sell key assets like their land.

“N’Guessan’s story clearly illustrates how insurance can make a huge difference, particularly for the most vulnerable,” said Craig Churchill, who heads the ILO’s Impact Insurance team. “Huge progress has been made in recent years, with more than half a billion low-income people estimated to have access to some form of insurance. We hope to keep up this momentum.”


Funding for the project is provided by the Agence Française de Développement (AFD).