Kenyan Insurtech firm Pula has made its first payout of 39.4 million birr to 51,000 smallholder farmers in Ethiopia.
According to the announcement made at Pula’s Area Yield Index Crop Insurance Payout Event held today, April 25, 2024, the initiative, implemented during the 2023 Meher season, insured over 122,000 farmers against climate risks.
The payout is the result of a public-private partnership (PPP) between the Agricultural Transformation Institute (ATI), the World Food Program (WFP), and Pula. Funding is provided by the German Federal Ministry for Economic Cooperation and Development (BMZ) through the KfW Development Bank.
Pula’s insurance product safeguards farmers’ investments, particularly in fertilizers. In the event of a disaster, the payout ensures they have financial resources to purchase essential agricultural supplies for the next planting season.
To obtain insurance coverage, farmers pay a premium of 338 birr per bag of purchased fertilizer. In the event of a disaster, they receive a payout.
According to Dagmawi Haileyesus, Pula Ethiopia Country Manager, the highest payout is 1400 birr per bag, and the smallest is 400 birr per bag.
The insurance product bundles crop insurance with the established Input Voucher System (IVS) the formal input distribution channel in Ethiopia to provide comprehensive and affordable insurance coverage for smallholder farmers.
The initiative insured inputs for smallholder farmers in the Amhara Region, with prospects to extend its reach to 7.5 million farmers across various regions utilizing the IVS infrastructure.
The payout checks were officially presented to some of the policyholders at the event and are currently being distributed to all insured farmers.
“Pula recognizes the significant challenges Ethiopian farmers face due to unpredictable weather patterns,” stated Dagmawi Haileyesus, Pula Ethiopia Country Manager. “This payout is designed to empower farmers by helping them reclaim financial stability.”
Pula this month raised $20 million in Series B funding
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