Kenyan agriculture insurance startup Pula in partnership with APA Insurance on Tuesday announced a Sh85.1 million initial payout to 13,523 insured farmers in the Coast region for losses incurred during the 2021 March to May season.
The farmers are drawn from Kwale, Taita Taveta, and Kilifi counties that were affected by drought that occurred between March and May 2021. The farmers cultivate cowpeas, green grams, sorghum, and maize.
“The payout, made through lead insurer APA Insurance, targeted farmers participating in the KCEP-CRAL Program established by the Government of Kenya with support from European Union, IFAD, and FAO,” Pula Advisors said in a statement.
The programme reached over 100,000 farmers by the end of 2021, providing them with inputs, access to markets, and crop insurance.
The insurance product was developed by Pula to protect smallholder farmers from systemic risks such as floods, drought, diseases, and pests that significantly affect farm yield.
“Due to effects of climate change, farmers have to contend with unpredictable rain patterns, frequent droughts, and even the emergence of new pests,” said Rose Goslinga chief executive and co-founder of Pula Advisors in a statement.
APA Insurance is the lead insurer and Pula is the service provider who designed the AreaYield Index product and did risk assessment to determine the claims for the smallholder farmers.
In 2020, Pula raised $6 million (Sh660 million) from global venture capital backers for Africa and Asia expansion.
The Nairobi-based insurer that operates across 13 African markets said at the time the funding will help boost its local expansion in Kenya and beyond the African continent.
Founded by Goslinga and Thomas Njeru in 2015, Pula says it delivers agricultural insurance and digital products to help smallholder farmers navigate climate risks, improve their farming practices and bolster their incomes over time.
Small farmers produce up to 80 percent of the food supply in Africa and Asia and face a 90 percent chance of crop loss due to factors outside of their control, such as pest outbreaks and severe drought.
But most of these farmers don’t have any form of crop insurance. If they lose their crops, they lose their income, and can only pray for a better harvest next season.
Pula says it provides farmers with insurance bundled with inputs (such as seeds and fertiliser) and farmer advisory services to help increase their yields and boost (and protect) their income.