Saturday, April 17, 2010

Farmer's Insurance

People tend not to invest in risky endeavors unless they can cover their losses fairly easily. For African farmers trying to make ends meet, failure can mean paying the ultimate price of life. Many lenders steer clear of farmers because of the inherent risks involved with the industry.

Approximately 70% of African households in the Eastern Region operate through the agricultural industry. However, credit institutions in the area only lend to farmers 2% of the time.

Innovations for Poverty Action and the Mumuadu Rural Bank have teamed to provide loans for agriculture in Ghana with insurance that partially protects against any losses due to poor crop prices. The goal of this project is to reduce farmers' risk and overall encourage greater investment in farming inputs.

-Nick Mohazzabfar