FMRE Holding, a wholly owned subsidiary of Africa First Renaissance Corporation (AFRE) which recently rebranded to First Mutual Holdings Limited, has said it is looking at introducing new products in Botswana, particularly the agriculture and credit insurance.
Speaking on the sidelines at the unveiling of the new holding company brand last week, Ian Taonesa, Managing Director at FMRE said that they chose to consider crop and livestock insurance in line with the government strategy to reduce the importation of food products and encourage self sufficiency.
“This is again to protect farmers against unforeseen circumstances as well as improving their lives. We also want to introduce micro-insurance, which will be part of one’s financial inclusion. The agriculture insurance will be introduced immediately as there is already infrastructure available and is accredited, whilst the micro-insurance will be introduced in two years time,” he said.
In his 2009 State of the Nation address, President Ian Khama indicated that financial institutions have often been reluctant to offer loans to farmers in the absence of an agricultural insurance scheme. To fill this gap, he said government has encouraged the setting up of such a scheme. “We are also undertaking a Botswana Agricultural Sector Review to develop a consolidated turnaround strategy for the sector. Overall, it is my intention to significantly grow the agricultural sector to greatly improve our food security and self sufficiency and reduce poverty,” he said at the time.
The scheme is aimed at minimising farmers’ risks caused by annual and in-season climatic variability and by other extreme natural disasters.
Permanent Secretary in the Ministry of Agriculture, Dr Marcus Chimbombi confirmed that the insurance scheme has not taken off yet. “The farmers have to contribute and we have not received any uptake from them,” he said.
In an interview Barclays Bank of Botswana Acting Managing Director, Aupa Monyatsi said the bank has directly and indirectly extended facilities to farmers and will continue to offer financial solutions for this segment.
He said farmers need to be more organised and have security, but unfortunately some treat farming as a hobby. “We have provided financial assistance for purchasing of farms and vehicles to mention a few. They should have financial forecast, just like in any other business. If government could provide agriculture insurance for emerging farmers, that way it will not be difficult for them to repay commercial banks,” said Monyatsi.
He said that those who have been funded by the bank have been able to repay the loans. He said as the bank continues to improve its product offering for farmers, their integration with ABSA gives them access to agric-specialists and this will enhance its expertise in this segment.