Kenya’s innovation offers a non-traditional insurance product to pastoralists facing extremely high risk from increased drought. The insurance product the team created has helped protect pastoralists’ livelihoods, while encouraging positive drought mitigation strategies.
Drought is becoming more and more frequent in Kenya’s arid lands. Pastoralists, whose livelihoods depend on the land for grazing their livestock, are extremely vulnerable. The way pastoralists have coped with drought in the past isn’t enough to overcome the more frequent and severe drought cycles they are now experiencing. There is increasing potential for one bad year to result in catastrophic losses of livestock – such that pastoralists cannot recover.
Mercy Corps recognized that pastoralists need a way to smooth the losses they experience during a drought, so that their income streams are less volatile and, most importantly, they are protected from a total loss – meaning all their livestock die and they have no income. Insurance would be a way to transfer the risk evenly over time.
To overcome these constraints, Mercy Corps facilitated a unique partnership between Takaful, a Kenyan-based insurance company, and the International Livestock Research Institute to introduce a customized insurance product: Index-Based Livestock Insurance. Rather than determining the actual number of livestock lost, insurance payouts are based on a system that compares current measurements of the insured pastoralists’ rangeland through satellite, and estimates their losses based on an index of historical drought, and vegetation and livestock data from past drought years. In this way, the insurance actually encourages and rewards pastoralists who continue to practice good production practices and employ drought mitigation strategies.
Mercy Corps trained the insurance company’s community-based sales agents and developed a marketing campaign to demonstrate how the product could protect pastoralists during drought.
Though still a young program, initial testing has shown it’s on track to be successful. In just August - September 2013, pastoralists purchased insurance to cover more than 2,040 livestock (including cattle, camels and sheep). Their coverage is worth $86,220, enough to provide an effective safety net as they entered the next season.
This kind of insurance is a new concept for the pastoralist community in northern Kenya, so it was essential for the Mercy Corps team to invest considerably in informing the community, especially local leaders and opinion shapers to sanction the idea, about how the insurance product might benefit pastoralists. Through feedback and analysis, the team is developing better marketing and communications strategies to reach more pastoralists and increase sales of the insurance product. The initial success of the project is driving the team to include Index-Based Livestock Insurance as part of a package to build pastoralists’ resilience in other programs going forward.
Mercy Corps has been working in Mongolia since 1999. Over 30 projects have been implemented during the past 15 years. Naturally, Mercy Corps produced thousands of valuable documents, reports, surveys, analyses, and training manuals related to rural economic development, civil society, good governance and environmental stewardship.
Mercy Corps has started to collect and store final documents produced by the past and current Mercy Corps’ projects. These documents will be archived and then shared with all staff on MC Internal Website. Some documents will be publicly available on our official website.
One of the objectives of the USAID funded APPEAL project is to promote understanding of key elements of legal framework related to anti-corruption and good governance at local level.
Within framework of this objective, the APPEAL project has set to conduct a research analysis (develop case study) on certain good/bad practices of accountable governance, identify how the practices/ processes work, how the processes influence/impact to improving civil service practice (procurement process) and disseminate the results to local government and CSOs for study and possible replication.
The Mongolian Development Institute was selected to do this job. The signing ceremony between Mercy Corps and the Mongolian Development Institute took place today, on 18 April, 2014, at the Mercy Corps office.
• Sign an agreement with Case study organization
• Organize meeting with sub grantees on progress and reporting
• 3-day training of trainers to increase the response capacity of local stakeholders
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