Focus Media (Kigali)
Steve Rukundo
15 June 2008
During a workshop which saw the participation of representatives from ministries, insurance companies, micro-finance institutions (MFI), banks and the donor community, the content of the strategy was discussed in detail, and the strategy validated. The national rural insurance strategy is based on the findings of the field visits and discussions with the stakeholders.
The aim of this strategy is to provide insights, analytical opportunities and a framework for developing rural insurance services, particularly in the areas of micro-insurance, in stimulating the Rwandan economy. and this in a way so that it can be implemented by insurance companies, MFI, cooperatives and other organizations independently or in the form of support and partnership.
"It would be of no use to invest without insurance," the Minister of finance and economic planning, James Musoni, remarked. "If there is investment in the economy, this will create opportunities for people in areas such as employment and increasing savings. It will also lead to more loans, which will contribute to national development."
The governor of the central bank, François Kanimba, emphasized that a lot of energy will have to be put on investing in agriculture, a sector which has not been fully exploited.
Christophe Bazivamo, the Minister of agriculture, for his part explained the importance of the insurance. "This has come at a very crucial moment, because investors had fear of investing in agriculture because of natural disasters. This strategy has come to respond to their needs, and I believe it will give a boost to investment in agriculture," he said.
Presenting the strategy, Xavier Ngarambe of the Financial Sector Development Secretariat (FSDS) also showed that there is a relationship between insurance and access to credit. He also said that insurance in rural areas are costly since investment there is considered to be risky, and the agricultural operators are mainly small-scale.
Therefore, rural insurance intends to establish sustainable systems covering both urban and rural areas, covering risks such as production and market failure, new partnerships and innovations, and addressing risk coping methods.
Ngarambe also stressed the importance of the scheme given the contribution of the sector to the economy. He remarked that the insurance would make the sector more market-driven, in accordance with the EDPRS.
The rural sector insurance strategy aims at proposing innovative micro insurance products, share experience nationally and internationally. It also comprises a five-year action plan, and provides insights and indicative opportunities.
This study was carried out by analyzing literature as well as regional experiences, and by field research to identify crop areas and cooperatives for potential pilot project. There were also several meetings with insurance companies, banks, MFI, government stakeholders and international experts.
During the meeting, the sector stakeholders raised various issues to be taken into consideration. "You should take into account that there are some crop diseases for which there are no pesticides," one Patrick Hakizimana said, and this is another reason why entrepreneurs might not invest in agriculture.
Another participant, Johnson Mugaga, proposed that the strategy should be seen in a wider perspective, and not just on the micro level, since the plan covers the entire nation.
Farmer Emile Mutunzi, for his part, expressed the fear that the insurances might be too expensive for small farmers. "Most of us are low income earners, we are poor and have hardly any cash reserves," he pointed out.
"The insurance will profit farmers in case of catastrophes such as natural disasters, so that they can recover the loss", Minister Bazivamo replied. He further explained that the insurance will exactly be an incentive for banks to grant credits to the agricultural sector.
Be the first to Write a Comment!
Copyright © 2008 Focus Media. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
