CROP INSURANCE FOR AFRICAN FARMERS:

Opportunity International, a global microfinance network based in Oak Brook, Ill., announced its partnership with the World Bank and its affiliated IFT Commodity Management Group to provide index-based weather insurance to rural farmers in Malawi, Africa. This new policy, test piloted among 892 low-income groundnut farmers in famine-stricken Malawi, extends credit previously inaccessible by mitigating weather risks and isolating farmers and lending institutions from environmental factors.

Opportunity International and the World Bank designed the coverage to pay out if insufficient rainfall for groundnut production occurred in Malawi. Before the new policy, banks were unwilling to lend to farmers primarily because of the risk that farmers would not have the ability to pay back loans if there was a drought. By clarifying environmental affects with the assistance of weather stations and establishing growth periods and expectations, farmers can secure funds needed to purchase a more profitable seed and lenders are confident to issue loans.

The policy also provides area lenders, including the Opportunity International Bank of Malawi, the ability to extend operations due to a new security loan that will be paid in full even in the situation of extreme drought. The index based weather insurance has been well received by farmers and lending institutions in Malawi.

Opportunity International offers small loans, basic business training, health education and insurance and savings services to more than 760,000 poor entrepreneurs in Africa, Asia, Eastern Europe and Latin America. For more information about Opportunity International, visit http://www.opportunity.org/.