Barriers to micro-insurance outreach for pastoralists and crop farmers in rural areas in Kenya

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Micro insurance in Kenya is still undeveloped compared to micro credit and micro savings due to the fact that it offers no immediate benefits to the insured. Insurance companies in Kenya have been taking long to compensate their clients in the case of any peril and therefore insurance is seen as a way of stealing the money from the citizens. This study has looked into ways of making micro insurance locally available to both large and small scale crop farmers. It has gone a step further to investigate ways of merging up micro insurance and micro credit by using insurance as collateral to acquire loan. It was realized that there is a possibility of selling an insurance contract to a buyer of produce whereby the farmer can later pay the premium after the harvest of the produce. Moreover, there is a possibility of the harvest being used as collateral when it is in the warehouse of the Kenya National and Cereals Produce Board (NCPB). This increases the creditworthiness of the otherwise not qualifying-for-credit farmer as well as the produce being stored waiting to hit the market highs in order to be sold for profit. To make use of the technology, this paper calls for the development of a mobile application that will enable farmers access information in real time on their mobile phones and thereby being able act accordingly.