From floods to drought, microfinance companies are looking at ways for farmers in developing countries to cope better with the vagaries of climate change.
According to the Microcredit Summit Campaign, there were over 137 million very poor families worldwide with a microloan in 2010. The industry has grown increasingly sophisticated, though it has also gained a bad reputation in parts of the world for selling very high-interest loans to very poor people, with the Indian state of Andhra Pradesh curbing their use.
Microfinance companies are now looking to extend their reach with crop insurance in Africa. Small farmers in African countries cannot get regular crop insurance, but a successful project in India uses weather stations to calculate the weather and its possible impact on harvests within reach of those stations, working out claims automatically.
“The poor are suffering more because of climate change than anybody else,” says Scott Brown, president and CEO of microfinance company VisionFund International.
“The world is struggling with disaster insurance, it could be flood, drought, earthquake. The challenge is to try and get a product.”