Rolling out Financial Inclusiveness through Livestock Insurance and Securitisation in Rural Communities

Rolling out Financial Inclusiveness through Livestock Insurance and Securitisation in Rural Communities

ZimbabweZimbabwe
Project Stage:
Idea
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Providing alternative financial resources in the form of livestock insurance, funeral/life insurance, disaster insurance and savings mechanisms for rural people

About Project

Problem: What problem is this project trying to address?

Most rural communities in Africa and Asia remain excluded from financial systems. However, their subsistence and economic activities would be enhanced by building inclusive financial systems that bring them into national financial systems. Most rural communities’ livelihoods are based on agriculture and other economic activities such as mining, arts & crafts, carpentry, etc. To effectively build financial systems that bring these rural based and often large sections of the population, into financial systems, we need to monetarize their economic activities. We also need to break with the tradition that rural communities or unbanked communities need “just loans” or credit, and embrace the future-oriented realism that these communities need full and all-round financial services/financial solu

Solution: What is the proposed solution? Please be specific!

1. Medical Insurance or medical cover to take himself or his child to hospital in the case of sickness, 2. Funeral cover/Life assurance in the case of death 3. Disaster cover/short term insurance in the case of natural disasters or life disruptions 4. Savings mechanism to smoothen expenditures in the case of acute cycles of prosperity seasons and drought periods.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

To effectively build inclusive financial systems, we need to examine the activities of the local communities and try to attach some economic value on those activities or assets. Most rural communities would ordinarily have livestock on their homesteads, and to unlock the financial value of those livestock, we need to attach an estimate value. For example in Africa, cattle are the most common store of value for communal farmers or subsistence farmers. If we manage to attach value on each beast, we can increase access to credit for most rural subsistence farmers that are currently excluded from our financial systems. Here we propose how we might go about securitising cattle, and broadening financial access to rural subsistence farmers. We assume that the MFI is a hybrid MFI which offers not only loans, but the full range of financial services.
About You
About You
First Name

Robert

Last Name

Chihota

About Your Organization
Organization Name
Organization Country

, HA

Country where this project is creating social impact

, XX

How long has your organization been operating?

Please select

Has the organization received awards or honors? Please tell us about them

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Innovation
How long have you been in operation?

Still in idea phase, but looking to launch soon

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Cost.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

The overriding goal of this initiative is to make it easy for the majority of rural communal farmers owning livestock (cattle, goats, sheep, chicken, etc) to enter the mainstream national financial systems by translating their livestock into some form of measurable financial assets. Billions of rural farmers own livestock. So we convince them to insure their livestock through livestock microinsurance. After this they will be able to borrow from MFIs and pledge their insured livestock as collateral.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

The lack of affordable financial products tailored to the needs of underserved and excluded communities,.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

Rural communities.

Could your solution work in other geographies or regions? If so, where?

Wherever there are rural communities

If your solution is dramatically successful, how will things be different in 10 years?
What will have had to have changed to make this happen?
What has been the impact of your solution to date?
What is your projected impact over the next five years?
What barriers might hinder the success of your project? How do you plan to overcome them?
Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Identify three major tasks you will have to complete to reach your six-month milestone
Task 1
Task 2
Task 3
Now think bigger! Identify your 12-month impact milestone
Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1
Task 2
Task 3
Sustainability
Tell us about your partnerships
Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

We are also targeting urban populations, cooperatives and other populations involved in poultry projects, fisheries, etc. Because their livestock is now insured, these sections of the populations have been able to access loans from local financial institutions.

What type of operating environment and internal organizational factors make your innovation successful?

The operating environment should have the following;
-huge sections of unbanked rural populations
-prevalent livestock ownership by rural populations or other sections of the populations
-basic literacy (some form of social intermediation needed) to educate rural livestock owners on benefits of livestock insurance
-Funding for MFIs to be able to offer loans to meet the demand arising out of the livestock owners
-Absence or little presence of microfinance/microinsurance/medical insurance in targeted areas.
-Reliable Livestock markets

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list