Investors in agriculture sector to be insured

In order to help alleviate poverty in rural areas, the Rwandan government is partnering with the country’s insurance companies to attract more investments in the agricultural sector. Société Nouvelle d’Assurances du Rwanda (SONARWA) director general Corneille Karekezi explained that investors are hesitant to put money into the rural sector without insurances that they will be paid back. “If you want to give someone a cow, on loan, that cow may die, and he will not be able to pay you back, so you ask him to take out insurance. [It’s the same] if you’re investing in tea or coffee or tomatoes, and so on,” Karekezi said yesterday after meeting with stakeholders at SONARWA offices to discuss further planning of the project. Karekezi said the major challenge right now is building supply and demand for the product among farmers. Traditional insurance companies are not going into rural communities to supply agricultural insurance, Karekezi said, but at the same time, the farmers are not demanding it. “The demand will be created through institutional cooperatives, popular banks, development banks, who want to invest in the rural sector and insurers will come and support those initiatives so that all those efforts are viable and visible,” he said. Karekezi said he believes the program will be successful, as it has worked in countries such as India and the Phillipines. “We’re trying it, we’re starting,” he said. “If you go in terms of money, it’s a lot of money, huge, big money, even larger than what we underwrite today. Now, the question is the losses. The losses can also be huge. You can have Frw100 billion of insurance premiums, and pay Frw120 billion of claims, so that’s not a good business. We don’t know [the details of how it will work], we’re putting all of our efforts together.” The government would like the initiative to begin this September, Karekezi said, but the earliest everyone involved can get on board is January 2009. Ends

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Investors in agriculture sector to be insured