Seeds of prosperity v2.1 print friendly

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Process flow of RHoK Payment 2 Mobile project

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Seeds of prosperity v2.1 print friendly

  1. 1. Seeds of Prosperity Crop Insurance for Developing Countries Ian Hopkins | Sandeep Chandur | Laura Boudreau | Daniel Broome
  2. 2. Problem <ul><li>Exposure to natural disasters reduces propensity to purchase quality farm inputs. </li></ul><ul><ul><li>Fear of extreme weather events i.e. drought, flooding, wind, etc. prevents small farmers from buying improved seed and other inputs. </li></ul></ul><ul><ul><li>Example: half of Kenyan farmers use poor-quality seed from previous harvests resulting in sub-optimal yields. </li></ul></ul><ul><li>Crop insurance facilitates food security. </li></ul><ul><ul><li>Crop insurance mitigates exposure to extreme events, could facilitate access to financing, encourages the use of higher quality inputs, ultimately improves yields, and food security. </li></ul></ul><ul><li>Technology reduces cost of providing insurance. </li></ul><ul><ul><li>The provision of crop insurance is currently limited by the disproportionately high administrative costs of conventional insurance practices. Innovative parametric insurance products reduce administrative complexity while SMS based payment interfaces provide for rapid and secure settlements. </li></ul></ul><ul><li>There is a need for a platform capable of brokering, monitoring, settling, and auditing insurance coverage and payouts. </li></ul>Slide 2
  3. 3. Solution <ul><li>Technology. </li></ul><ul><ul><li>By using a very simple text message interface the solution provides an automated method of receiving input, brokering quotes, facilitating the purchase via payments by phone, confirming the purchase, monitoring weather conditions, and triggering payouts. </li></ul></ul><ul><ul><li>The platform was built in Java using Google AppEngine, Big Table and an SMS gateway. </li></ul></ul><ul><ul><li>The platform allows for pluggable insurance providers and protocol for expansion . </li></ul></ul>Slide 3
  4. 4. Process Flow Slide 4a Stakeholders and Systems Vendor Customer System Insurance providers
  5. 5. Process Flow Slide 4b Request quote (SMS) Quote - Request, <Cust ID>, <Location>, <Qty>, <Product>, [<Qty>,<Product>] Customer System Built Planned Vendor
  6. 6. Process Flow Return quote (SMS) Source best quote Slide 4c Quote – Return,, <Cust ID>, <Premium> Vendor Customer System Insurance providers Built Planned
  7. 7. Process Flow Execute purchase (SMS) Initiate payment Slide 4d Pay premium Quote – Return,, <Cust ID>, <Premium> Agree purchase with customer Vendor Customer System Insurance providers Built Planned
  8. 8. Process Flow Confirm payment Slide 4e Vendor Customer System Insurance providers Built Planned Coverage, <Policy Id>, <Expiry>, <Risk>, <Qty>, <Product>, [<Qty>, <Product>] Confirm coverage with customer (SMS)
  9. 9. Process Flow Slide 4f Extreme weather event notification (SMS) Customer System Insurance providers Built Planned Initiate payment Notify insurer
  10. 10. Process Flow Slide 4g Report payment Notify customer (SMS) Customer System Insurance providers Built Planned Make payment to customer (SMS)
  11. 11. <ul><li>Availability of crop insurance will lead to a virtuous cycle of improved access to financing, the use of higher quality inputs, higher yield and improved food security. </li></ul>Advantages to Rural Commuities Slide 5
  12. 12. Advantages to Sponsoring Organization <ul><li>Gather statistics on farming in developing countries </li></ul><ul><ul><li>Number of farmers, amount and value of inputs, concentration of agricultural activity </li></ul></ul><ul><li>Direct participation in micro finance and insurance </li></ul><ul><ul><li>Reduce dependence on NGO’s and local governments to distribute development funding </li></ul></ul><ul><li>Create communities of farmers </li></ul><ul><ul><li>Ability to disseminate information to farmers (SMS) </li></ul></ul><ul><li>Influence and accelerate the adoption of mobile money </li></ul><ul><li>Ability to measure and study mobile money economy </li></ul>Slide 6
  13. 13. Role of Intermediary <ul><li>Governance </li></ul><ul><ul><li>Independence from the interested parties will ensure the integrity of payouts. (i.e. by separating the collection of weather data from the insurance providers). </li></ul></ul><ul><li>Protection against monopolistic practices </li></ul><ul><ul><li>By providing for multiple insurance providers and by searching for the best quote the system will protect customers and prevent the emergence of monopolies. </li></ul></ul><ul><li>Infrastructure investment </li></ul><ul><ul><li>As an intermediary responsible for transactional integrity there will be a requirement to invest in weather monitoring infrastructure. </li></ul></ul>Slide 7
  14. 14. Accomplishments to Date & Next Steps <ul><li>Selection of insurance partners </li></ul><ul><li>Refine requirements </li></ul><ul><li>Investigation of SMS protocol </li></ul><ul><li>Integration to mobile payment infrastructure (M-PESA in Kenya) </li></ul><ul><li>Security and auditing </li></ul><ul><li>Develop commercial partnerships </li></ul><ul><li>Infrastructure funding needed for monitoring stations and enhancements technology development </li></ul>Slide 8

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