Microinsurance: Insuring crops with a mobile phone

An article in The Economist informs about a new microinsurance scheme promises to help "safe farming".

Farmers in Kenya pay an extra 5% to insure a bag of seed, fertiliser or other things like herbicide against crop failure. Agribusinesses hoping to benefit from higher sales of their products, match the farmers’ investment to meet the full 10% cost of the insurance premium.

Agents register a policy using a camera-phone and a text message confirming the policy is then sent to the farmer’s handset. If weather conditions deteriorate, a panel of experts determine if crops will no longer be viable and payouts are made directly to the handsets of farmers in the affected areas using a mobile-money service.

Read the full article.