Give farmers loans with crop insurance product

Sadharan Bima MD tells financial institutions

FE Team | Published: December 09, 2017 22:00:28

Our Correspondent
RAJSHAHI, Dec 09: Managing Director of Sadharan Bima Corporation (SBC) Syed Shariar Ahsan on Saturday said the financial institutions providing agricultural credit to farmers can package 'weather index-based crop insurance product' with the loans.
Such kind of arrangement will protect framers from losses as well as add value to the credit scheme and ensure a risk-free loan disbursement on the part of financial institutions, he explained.
Selling insurance products through banking channels is called 'bancassurance', which life and non-life insurers' had been demanding for long, he said, adding that both the central bank and the insurance regulator, IDRA, need to make joint efforts to introduce such service.
He emphasised that the lending agencies could utilise crop insurance products to add value to the agricultural loan products.
The top official of Sadharan Bima made the suggestions while speaking as the chief guest at its crop insurance claims settlement programme held at the Simanto Conference Centre in Rajshahi city, with Weather Index-based Crop Insurance (WIBCI) Project Director Wasiful Hoq in the chair.
Senior officials from the SBC and the meteorological department attended the event organised by WIBCI of the SBC.
Under the WIBCI project, over Tk 5.0 million has so far been distributed among the farmers through five pilot projects in three districts -- Rajshahi, Sirajganj and Noakhali. This was the fifth pilot project and farmers of Rajshahi received Tk 910 in insurance settlements for one bigha of cropland.
Mentioning that the financial institutions are now providing loans only for purchasing seeds, fertiliser and irrigation purposes, Syed Shariar Ahsan said, "I think this [weather index-based crop insurance] will also help diversify the loan products and create new avenues for profits for them."
He also stressed the need for promoting this new insurance product through raising awareness among the farmers across the country.
Delivering the welcome speech, project director Wasiful Hoq said such type of insurance has already been available in different countries across the globe, including neighbouring India.
He also emphasised the need for government subsidy for this insurance product to make it sustainable.
Replying to a question from the farmers as to whether the rate of insurance payout would be increased, he said the amount of compensation depends on the rate of insurance premiums.
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