Crop, livestock insurance products launched

Weather-indexed facility to protect small farmers.

ISLAMABAD:

The Pakistan Poverty Alleviation Fund (PPAF) has launched the first-ever weather-indexed micro-insurance products to facilitate and compensate small farmers in Pakistan.

In this connection, a ceremony was arranged here on Tuesday, presided over by Securities and Exchange Commission of Pakistan Commissioner Muhammad Asif Arif and attended by representatives of the State Bank of Pakistan, World Bank, International Fund for Agricultural Development (IFAD), KfW – German development bank, UKAID, Tameer Microfinance Bank and others.

Speaking on the occasion, Arif said micro-insurance stands at a critical juncture in Pakistan and praised PPAF for introducing indexed crop and livestock insurance products.

He reaffirmed SECP’s commitment to promoting micro-insurance through research, introducing pivotal regulations and promoting a healthy policy environment.

PPAF board member Zubyr Soomro pointed out that the need for micro-insurance has been felt over the years and it is the tipping point to give it a big push. “We would have to make the most of this opportunity,” he said, adding sincere efforts are needed to make micro-insurance sustainable.



PPAF Chief Executive Qazi Azmat Isa attributed the micro-insurance initiative to close collaboration between PPAF and IFAD. He said farmers are badly affected by climate change, fluctuation in prices of their produce and poor quality of agricultural inputs and micro-insurance would prove to be a vital instrument in fight against poverty.

Senior Joint Director Agricultural Credit & Microfinance Department of State Bank of Pakistan, Kamran Bakshi, said the launch of indexed and hybrid weather micro-insurance has provided a unique platform to market leaders to serve the poor, particularly the farmers. He stressed that focus must be on protecting the borrowers.

PPAF’s Senior Group Head Ahmad Jamal said the fund is committed to grassroots development and micro-insurance would prove to be one of the instruments in alleviating poverty. He said PPAF would capitalise on its outreach so that maximum people could benefit from micro-insurance.

PPAF’s Financial Services Group Head Yasir Ashfaq stressed that indexed insurance products are easy to administer, transparent, innovative and significantly reduce chances of moral hazard or fraud.

He said PPAF envisions increasing the scope of these products across the country, preparing detailed indices for various districts with the support of stakeholders including government agencies, donors, microfinance institutions and insurance companies.

The insurance products have been designed by PPAF, with the support of IFAD through a strategic partnership with SECP. These products have been developed in collaboration with the Meteorological Department and Livestock Research Institute and are based on needs of low income farmers. PPAF has launched these products as a pilot project in collaboration with insurance companies in the districts of Khushab and Chakwal.

Published in The Express Tribune, January 30^th, 2013.

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