MICROCAPITAL BRIEF: International Finance Corporation (IFC), SANASA Insurance to Provide Microinsurance to Farmers in Sri Lanka

The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, has partnered with Sri Lankan microinsurance company SANASA (Thrift, Credit and Cooperative Society in Sinhala) Insurance to “develop flexible, affordable, weather-based agricultural insurance products in Sri Lanka to minimize the impact of crop losses due to floods or droughts.” The project is expected to expand access to insurance for 15,000 small-scale farmers and raise awareness of the program among 50,000 farmers. No release date for the insurance program is available [1].

The weather-based agricultural insurance product pays out benefits according to pre-assigned values for losses from various weather or catastrophic events. IFC argues that index-based insurance products remove the need for insurance companies to individually verify claims, reducing transaction costs and disbursing payouts more quickly. The effort is supported by the Global Index Insurance Facility (GIIF), which was established by the IFC in 2009 “to assist the development of index-based insurance for natural disasters and weather risks in developing countries, particularly in agricultural communities where insurance is rarely available” [1].

Founded in 1989, SANASA reports serving 15 percent of the Sri Lankan population with life, motor or agricultural insurance through 40 branch offices.

As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and total investment mobilization of USD 12.2 billion to 518 projects. IFC’s investment portfolio of USD 200 million in Sri Lanka covers projects in infrastructure, tourism, renewable energy, finance and healthcare.

By Brendan Millan, Research Associate

About International Finance Corporation (IFC): A member of the World Bank Group, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and total investment mobilization of USD 12.2 billion to 518 projects.

About SANASA Insurance Company Limited (SICL): SICL is a microinsurance provider based in Sri Lanka. Founded in 1989, SICL reports serving 15 percent of the Sri Lankan population with life, motor or agricultural insurance through 40 branch offices.

Sources and Resources:

[1] International Finance Corporation (IFC): “IFC, SANASA Insurance Pilot Weather Index Insurance for Sri Lankan Farmers” by Minakshi Seth. http://www.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/C71CDBEE16F14289852579EB004A103B

MicroCapital.org story, April 3, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC) Invests $10m in Equity in Chilean Insurer Aseguradora Magallanes”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-invests-10m-in-equity-in-chilean-insurer-aseguradora-magallanes/

MicroCapital.org story, March 8, 2012, “MICROCAPITAL BRIEF: International Finance Corporation (IFC), KfW Bankengruppe, German Federal Ministry of Economic Cooperation and Development (BMZ) to Invest $100m in Micro Finance Initiative for Asia (MIFA)”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-kfw-bankengruppe-german-federal-ministry-of-economic-cooperation-and-development-bmz-to-invest-100m-in-micro-finance-initiative-for-asi/

MicroCapital.org story, January 20, 2009, “MICROCAPITAL STORY: The International Federation of Red Cross and Red Crescent Societies (IFRC) Cites Lack of Loans and Financial Services as Main Obstacles in Bringing Lasting Benefits to Tsunami Victims in Sri Lanka”, https://www.microcapital.org/microcapital-story-the-international-federation-of-red-cross-and-red-crescent-societies-ifrc-cites-lack-of-loans-and-financial-services-cited-as-main-obstacles-in-bringing-lasting-benefits-to-tsuna/

MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital Universe Profile: SANASA Insurance Company Limited (SICL), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SANASA+Insurance+Company+Limited+%28SICL%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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