Safaricom partners with insurance company

East Africa's largest mobile phone operator, Safaricom, has partnered with pan-African insurer UAP to offer low-cost mobile phone payments and data systems to thousands of farmers in the region.

The project is the first in the Eastern and Southern Africa region to use mobile phones to set up insurance contracts and issue payout to farmers using Safaricom's M-pesa service, a mobile money service transfer system. The data system will be transmitted through Safaricom's expansive national 3G network. Safaricom is the only mobile operator in East Africa currently operating on a 3G network.

The project, dubbed "Kilimo Salama," which in Kiswahili means safe farming, is also a partnership with the Syngenta Foundation for sustainable agriculture. It was conceived to offer farmers insurance policies to shield them from significant financial loses from drought or excess rain.

The Syngenta Foundation is a non-profit organization based in Basel, Switzerland.

Poor and extreme whether conditions, particularly drought, trap many African farmers in poverty.

"By utilizing state-of-the-art risk management tools, revolutionary mobile phone technologies and the knowledge and expertise of farmers, we have developed for the first time a model for providing farmers with reliable, low-cost cover from the vagaries of extreme whether," James Wambugu, executive director of UAP.

Agro-dealers registered and trained by Kilimo Salama have been equipped with camera phones that scan a special bar code when purchasing farm supplies. The bar code immediately registers with the UAP insurance policy system over Safaricom's mobile data network. The mobile phone application, developed by the Syngenta Foundation, then sends a text message (SMs) confirming the insurance policy to the farmer's mobile phone.

Some 30 weather stations in the targeted regions have also been renovated with automated, solar powered systems capable of broadcasting regular updates on weather conditions and rainfall quantities. When data transmitted from the Safaricom's 3G data network from a particular weather station indicates that drought or other extreme weather conditions including excessive rains are destined to cripple crops, all farmers registered with that station automatically receive payouts directly using Safaricom's M-Pesa mobile money transfer service.

The weather stations that are generally located in schools, private farms and other secure locations, allow experts to determine when the situation in a particular area has deteriorated to the point that crops are no longer viable.

The close link to rural shops and farmers ensures that thousands of farmers have fast, efficient and reliable service and shows that there is great potential for many other applications that link mobile technology with the needs of farmers and people in rural areas, according to Safaricom Chief Officer, New Products Division, Betty Mwangi.

As the larger program gets under way, the Syngenta Foundation and UAP expects to reach up to 5, 000 farmers in 2010. The plan is to then expand into other regions in eastern Kenya in 2011 and to all key farming areas of the country by 2012 with a goal of eventually offering the insurance to as many as 50, 000 Kenyan farmers.