At a well-attended workshop today at European Microfinance Week, Ovia Tuhairwe, the CEO of Radiant Yacu Microinsurance, described her firm’s journey to develop a viable product to insure livestock in Rwanda. On its own, a subsidy of 40 percent from the Rwandan government did not make it easy to insure cattle, pigs and chickens in the country. Before Radiant Yacu moved to its current model in 2019, fraud was rampant, and costs were high at 10 percent of the value of the animals. Users manipulated the tattoos, anklets and ear tags used to identify insured animals so that they could make fraudulent claims on uninsured animals. The product failed.
In 2019, Radiant Yacu rolled out a new product using RFID tags to identify insured animals. The tags, which are about the size of a grain of rice and are injected behind an ear of each animal, are resistant to fraud. The product has been a great success, and Radiant Yacu has cut the price to 5.5 percent. Likewise, the firm no longer requires a waiting period between premium payment and eligibility for a payout.
Meanwhile, cattle have become usable as collateral to allow owners to borrow against. Lenders used to turn away the livestock owners, but now they pursue them with loan offers. This is in part because the insurance product requires vaccinations, which have contributed to farm productivity.
The success of the product was not immediate, however. It did not gain significant traction until Yacu Microinsurance started accepting payments via mobile phones (including feature phones, not only smartphones). Now the firm is having success with the standalone product and by bundling it with savings services as well as health and life insurance.
This feature is part of a sponsored series on European Microfinance Week, which is taking place in Luxembourg and online through November 18. MicroCapital has been engaged to report on the conference each year since 2012.
Additional Resources
European Microfinance Week 2022
https://emw2022.eu/
European Microfinance Award
https://www.european-microfinance-award.com
MicroCapital coverage of European Microfinance Week since 2012, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/
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