Using Blockchain to Help Farmers
In a recent announceThe Chainlink Community Grant Program is funding a blockchain project to aid smallholder farmers in Kenya.ment, the Chainlink Community Grant Program revealed that it was funding a low-cost insurance project between decentralized insurance protocol named Etherisc and ACRE Africa, an Africa-based micro-insurance issuer.
Per sources close to the matter, the Etherisc-ACRE Africa blockchain project aims to develop a distributed ledger technology-based (DLT) insurance platform that is seamlessly able to deliver affordable coverage for the nearly 250,000 smallholder farmers in Kenya.
Notably, many of these farmers are expected to be severely affected by climate change over the next three years.
In essence, the project wants to increase access to reliable and affordable crop insurance policies, enabling less-resourceful farmers to pay insurance premiums in small installments for as low as 50 cents.
Proceeds from the grant will be utilized toward financing several aspects of the project. These would include developing smart contracts, creating and testing a user-friendly front-end for farmers to interact with, integrating the platform with local payment systems, and several other technical developments.
A smart-contract enabled insurance platform will bring a swathe of benefits to the farmers. For instance, according to a study conducted by Etherisc and the Global Innovation Lab for Climate Finance, the use of Etherisc’s smart-contracts can reduce the costs required to issue a policy by as much as 41%.
Further, the automated and decentralized nature of the platform would also ensure timely payouts and complete transparency and independent verification of all outcomes.
Blockchain for a Good Cause
Commenting on the development, Michiel Berende, Chief Inclusive Officer, Etherisc, noted,
“We’re thrilled to be awarded a Chainlink Community grant to aid in our development of next-generation insurance infrastructure that provides third-world farmers with access to new insurance products for hedging against climate change risks.”
Similar sentiments were echoed by George Kuria, CEO, ACRE Africa, who said,
“We’re excited to be able to further our work with farmers in East Africa by receiving support through the Chainlink Community grant to help build out and implement a more reliable and cost-effective model for crop insurance with the collaboration of Etherisc.”