Crop insurance project deal signed

IFC, a member of the World Bank Group, has signed an agreement with Bangladesh’s leading private insurer Green Delta Insurance Company Ltd to develop a crop insurance mechanism to protect rural economy.

Agriculture contributes about 20 per cent of Bangladesh’s GDP and employs close to half the labour force.

Frequent natural disasters, however, cause serious damage to crops and livestock each year.

Lenders are unwilling to extend credit to this sector exposed to natural disasters without risk-mitigating measures.

IFC Country Manager Kyle F Kelhofer and Managing Director of Green Delta Farzana Chowdhury signed the agreement against this backdrop on Tuesday.

IFC will assist Green Delta to develop mechanisms that minimize the impact of crop losses due to natural disasters.

“As a leading insurance institution in the country we believe crop insurance protects rural economy,” Chowdhury said during the signing.

“Weather-index insurance will help regulate farmers’ income and infuse reliability to this uncertain sector,” she said.

IFC Country Manager said through “index-based insurance, IFC will help provide a safety net to agribusiness and offer a range of financial services to farmers aimed at securing their livelihoods”.

The project is partly funded by IFC’s Global Index Insurance Facility, a multi-donor trust fund supporting development and growth of local markets for weather and disaster index insurance.

It focuses on developing countries, primarily in Asia, Sub-Saharan Africa, Latin America and the Caribbean.

Its donors include the Netherlands, European Union, and Japan.