A new marketing approach based on urban migrants in Burkina-Faso was discussed by MiN members Making Finance Work for Africa (MFW4A) and PlaNet Guarantee as well as their partner, Innovation for Poverty Action (IPA) during a webinar organised recently.
Below, is a preliminary summary of the different learnings and results discussed:
- A preliminary research conducted by IPA in North Ghana showed that risk, rather than capital access, is a major constraint on investment for farmers. The aversion to the risk of adopting costly inputs significantly explains the underinvestment in agriculture and can be mitigated by weather insurance. In a sample of 252 farmers involved in the research study, farmers with weather insurance increased investment by 33%;
- The experience of PlaNet Guarantee in Sub-Saharan Africa and especially in Burkina-Faso highlighted the need and demand of agricultural insurance to secure farmers revenues and investments in a context of climatic change increasing variability in seasons and extreme climatic events. Index-based and microinsurance approaches adopted by PlaNet Guarantee made climatic risk insurable on the market and affordable for farmers, allowing for the security of more than 100,000 farmers last year in West Africa. Different scaling up strategies are currently being developed with financial institutions, agribusinesses and other farmer aggregators.
- IPA and PlaNet Guarantee entered into a partnership with the University of Kent and Oklahoma State University in the framework of the 3iE initiative to test an innovative distribution model based on farmer relatives living in urban areas.
o In a sample of 20 villages selected for the study, 56% of rural households have at least one relative in the capital, Ouagadougou. 124 urban migrants having relatives in these villages were identified.
o The preliminary studies showed that during the period 2014-2016, rural respondents experienced at least one adverse shock more than 50% of the time; 16.3% coped with using a transfer from relative, 31.6% got by by selling assets and 33.1% said they used no coping mechanism. About 30% of urban migrants receive requests for assistance when rainfall is sufficient, rising to nearly 60% when there is a shortage of rain.
o The distribution campaign with urban migrants obtained interesting results with an uptake of 23% and reduced marketing costs. They preferred insurance policies that pay out directly to their rural relatives.
The next phase of the study (2018-2022) will allow for extending the sample as well as the research questions. Opportunities offered on this model by mobile insurance and international diaspora will be explored also.
57 participants from 24 countries joined and interacted during the webinar with their inputs and questions. A full webinar report will be available soon.