Preloader

Inclusive Blockchain Insurance using Space Assets

Home|Inclusive Blockchain Insurance using Space Assets

Lead partner : IBISA SàRL

Local partner :

  • Réseau Billital Maroobé (RBM)
  • AREN

Associated : Draxis

    Sector

    Cleantech Eco Innovation/Circular EconomySpaceFintechHealthTechMobility & LogisticsICT

    Edition: 2018

    Country : Niger

    Project status : in progress

    BPF financing : 200 000 €

    Objective of the service

    IBISA enables the next generation of insurance, a mutual risk-sharing service designed to solve the uninsurability of smallholder farmers and pastoralists in the world.

    IBISA is a platform built on a decentralized mutuality-based system that enables the sharing of farmer-to-farmer risks in a transparent and cost-efficient way, harnessing the use of blockchain, satellite Earth Observation data and index-based risk modelling.

    It’s a B2B platform where local partners globally on-board farmers in the mutual community to share their weather-related risks. It uses blockchain as trust machine and to lower admin and operational costs.  It uses satellite data to design coverages and scale up damage assessment without using ground truth. It does monthly assessment & pay-outs removing the need of filing claims and providing timely compensation.

    Problem description of the smallholder farmers situation in Niger

    Niger is part of the customs and monetary union (called WAEMU) of the republics of Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Senegal, Togo and Niger itself. They share one Central Bank (BCEAO). Seventy-four percent of this region’s population lives on less than $ 2 per day.

    More than 80 percent of Niger’s 22.4 million people rely on agriculture for their food and income. Most grow crops and raise livestock on small family farms; however, drought and flooding are increasingly threatening livelihoods and food security.

    Back-to-back food and nutrition crises in Niger over the last few decades have pushed more people into hunger and poverty and worn down their ability to withstand shocks. An estimated 4.2 million people are at risk of food insecurity in this drought-prone Sahelian country, considered one of the world’s poorest and least developed.

    Conflict in neighboring countries, which has sparked the return of economic migrants as well as an influx of refugees, has further aggravated the food situation in Niger.

    This leads to the conclusion that Niger faces multiple environmental and economic challenges that directly impact its agriculture sector. There is a clear need for processes and products that provide effective means to protect farmers and pastoralists against crop losses and build a sustainable development for crops and pastoralism. Traditional methods (self-protection) are not adequate in the face of climate change and other challenges affecting this region, and farmers are ready to change their ‘habits’ and adopt new methods of protection.

    Expected impact in the project country

    Job Creation

    When farmers don’t have to sell assets after a crop loss, because they are protected by the mutual IBISA risk sharing, they will be able to expand their farm. This will be done by means of use of better quality seeds and by hiring extra farm workers during the time of sowing, weeding and harvest.

    People may earn an income by becoming watchers and perform online assessments of EO data.

    Technology and knowledge transfer

    Cooperatives will be trained in the utilization of the IBISA blockchain based marketplace. They will understand the added benefit of EO data. These trainers will raise awareness and educate farmers about the utilization of Mobile Money and the IBISA marketplace for the protection of the crops.

    Impact on the economic development

    This project will lead to income stability for the local communities. Farmers, as well as small shop keepers will be able to stay in business despite crop losses. Over time this will increase their income and create new jobs.

    IBISA works through RBM with local cooperative organisation AREN. These organisations feature grain banks, credit and savings groups as well as produce marketing groups. The immediate payment of losses will also provide stability for the cooperatives. Their loan portfolio is protected. Therefore, the Coop’s shall be willing to provide additional and higher loans and credits for inputs as seed and fertilizer. The turnover of Coop’s and their farmer members will increase, the investments in agriculture will enhance.

    All these developments will stimulate the overall economic development of the agricultural sector as well as of the SME’s in Niger.

    Social impact

    Women make up for around 60 to 80 % of smallholder farmers in Africa. However, they receive less than 10% of credit and 5% of other financial services like insurance of any kind[1]. This project will provide them with crop protection and enhance their attractiveness to MFI’s.

    Furthermore, the IBISA safety net will help to avoid emergency-based child labour.

    Environmental impact

    There may be even noticed an impact on the environment after a couple of years.

    Every dollar invested in improving yields leads to a reduction of 68kgC carbon emissions, as is calculated by Farming First.org[2].

    [1] https://farmingfirst.org/gender/

    [2] Farming First infographic ; www.farmingfirst.org/climate

    IBISA contributes to the SDG’s:

    Expected impact in the project country

    Job Creation

    When farmers don’t have to sell assets after a crop loss, because they are protected by the mutual IBISA risk sharing, they will be able to expand their farm. This will be done by means of use of better quality seeds and by hiring extra farm workers during the time of sowing, weeding and harvest.

    People may earn an income by becoming watchers and perform online assessments of EO data.

    Technology and knowledge transfer

    Cooperatives will be trained in the utilization of the IBISA blockchain based marketplace. They will understand the added benefit of EO data. These trainers will raise awareness and educate farmers about the utilization of Mobile Money and the IBISA marketplace for the protection of the crops.

    Impact on the economic development

    This project will lead to income stability for the local communities. Farmers, as well as small shop keepers will be able to stay in business despite crop losses. Over time this will increase their income and create new jobs.

    IBISA works through RBM with local cooperative organisation AREN. These organisations feature grain banks, credit and savings groups as well as produce marketing groups. The immediate payment of losses will also provide stability for the cooperatives. Their loan portfolio is protected. Therefore, the Coop’s shall be willing to provide additional and higher loans and credits for inputs as seed and fertilizer. The turnover of Coop’s and their farmer members will increase, the investments in agriculture will enhance.

    All these developments will stimulate the overall economic development of the agricultural sector as well as of the SME’s in Niger.

    Social impact

    Women make up for around 60 to 80 % of smallholder farmers in Africa. However, they receive less than 10% of credit and 5% of other financial services like insurance of any kind[1]. This project will provide them with crop protection and enhance their attractiveness to MFI’s.

    Furthermore, the IBISA safety net will help to avoid emergency-based child labour.

    Environmental impact

    There may be even noticed an impact on the environment after a couple of years.

    Every dollar invested in improving yields leads to a reduction of 68kgC carbon emissions, as is calculated by Farming First.org[2].

     

    IBISA contributes to the SDG’s:

    SDG 1: No poverty 

    IBISA is a crop protection system that enables farmers to share risks that are weather related and destroy their crops. In this way it provides a safety net and breaks the vicious cycle that keeps farming families in perpetual poverty.

    Because the fees are low and the assessment is fast, without the need for a farmer to claim, it will even support development efforts. The farmers will have money in their pocket to recover from setbacks, re-invest in their crops and feed their family. This income stability will also help the local community (small shopkeepers, artisans and others) to stay in business during times of harvest losses.

     

     SDG 2: “Zero” hunger

    Since IBISA will provide regular loss payments during the period of crop loss it will improve food security by stabilizing a household’s income after shocks.
    Another feature is immediate payment as soon as the Earth Observation data shows failure of the germination of the seeds as a result of drought or an abundance of (rain or flood) water. Farmers will be able to invest in a second sowing, still leading to a successful harvest. In this way local food production is stimulated. This immediate payment improves lending opportunities and encourages follow-on investments in agriculture.

     

    SDG 5: Gender equality 

    Women account for 60 to 80% of smallholder farmers and produce 90% of food in Africa and about half of all food worldwide. Yet in sub-Saharan Africa, only 15% of landholders are women and they receive less than 10% of credit and 5% of extension services[1].

    IBISA is one of such extension services. It will reduce the vulnerability of women towards vagaries of the weather and provide them with a safety net.

     

     SGD 8: Decent work and economic growth

    This crop risk protection will make farmers more attractive clients for banks or MFI’s. Having access to credit is important for smallholder farmers: Homesteads can borrow money to purchase food or other basic necessities and repay once they harvest and sell their crops. Breeders and pastoralists will be able to buy fodder for their cows so starvation of the herds will not happen again. And, indirectly, farm households often use credit to purchase inputs needed for farming (such as seeds, fertiliser, equipment) to enhance productivity. Again, after the harvest they can repay their debts. The presence of crop risk sharing will reduce the credit losses for banks and MFI’s and therefore reduce the volatility in the loan portfolio. As a result, they will expand credit income stability, with lower risk and greater ease, thus expanding their market. This will lead to a virtuous cycle of further growth, better productivity and stronger farm competitiveness.
    As a positive side-effect, having the IBISA safety net will help to avoid emergency-based child labour.

     

    SDG 13: Protect the planet 

    Climate change brings about major risks for farmers exposed to drought or excessive rainfall. Investments are made, also by smallholder farmers, to cope with the effects, such as a shift to drought resistant crops and fruit trees, drip irrigation, etc. However, these investments need to be protected. If not, farming communities will be forced to abandon lands that are more sensitive to climate change (e.g. northern sub-Saharan regions), and an abandoned farm is one that succumbs quickly to desertification or erosion. IBISA mitigates the financial effects of extreme weather events, and strengthens resilience, therefore keeping farmers in their ancestral lands. This is a key frontline in the fight against climate change, and farmers best suited to fight the good fight. IBISA is one of many tools.

    www.ibisa.network

    http://www.maroobe.com/

     

    [1] https://farmingfirst.org/gender/

    [2] Farming First infographic ; www.farmingfirst.org/climate

    [3] https://farmingfirst.org/gender/