A new partnership co-funded by the InsuResilience Solutions Fund has been established to help protect climate-vulnerable smallholder farmers and marginalised people in Western Nepal against flood.
The parametric risk transfer mechanism, managed by Frankfurt School of Finance and Management and funded by KfW Development Bank, measures flood flows and rainfall level via hydrometric gauging stations.
The premium will be subsidised by the federal government. Community cooperatives and microfinance institutions will act as insurance policy holder as well as distribution partners.
Nepal is highly prone to multiple natural hazards yet agriculture is the main source of income for more than 65% of Nepal’s population, contributing 27% to the national GDP.
Major floods and landslides are a regular phenomenon and cause devastating impacts on agricultural production and communities every year.
The project is implemented by a partnership consisting of the NGO Practical Action, as project coordinator, the insurtech Stonestep, the local insurance company Shikhar Insurance Co Ltd and the risk modeller Global Parametrics. ISF is providing co-funding for the product development of this innovative insurance solution.