Too Little Rain? No Need to Worry for Farmers with Digital Insurance Scheme

Farmers in central Kenya are tackling farming issues caused by a warming climate by joining a new credit scheme that provides farmers with credit vouchers and security for their loans, paying them down if the farmers’ harvests are damaged due to extreme weather.

Unlike traditional insurance, which only pays out when harvests fail, the Risk-Contingent Credit (RCC) scheme tracks rainfall patterns as they unfold using remote-sensing satellite technology. If the rainfall average drops below a set threshold within a 21-day period during growing season, it will trigger digital payouts to cover farmers’ loans.

“I get the right farm inputs – quality seeds and fertilisers on time – and I’m not worried about how to repay the loan as it’s insured,” says 56-year-old farmer Beatrice Ndavi from Masii village in Machakos County, to the Thomson Reuters Foundation.

Another farmer in Masii village, Moses Kyalo, says his farm had become more sustainable thanks to the RCC scheme giving him access to finance and agricultural training, as well as insured credit to help boost production, adding, “It gave me confidence to increase my investments into farming, unlike before.”