OKO has been providing insurance to smallholder farmers in Mali since 2020 to secure their income from damages caused by climate change. Also located in Uganda, this startup has helped over 15,000 farmers so far. Recently, it has raised funds to support its growth and conquer other countries.
Agriculture in Mali is the backbone of the economy. According to figures from the African Development Bank (AfDB), it contributes around 40% of GDP and employs nearly 80% of the working population. Unfortunately, this sector is facing a situation of rampant insecurity and especially the consequences of climate change. We think in particular about droughts and floods. These natural disasters destroy crops every year. The losses cannot be compensated for the lack of insurance.
Assessment of climatic conditions by satellite image
Facing this situation, Rafael Haziza, Shahzad Lokhandwala and Simon Shawal had the idea of founding OKO Fintech in 2018. This company allows agricultural producers to benefit from risk coverage in case of claims. In concrete terms, farmers receive compensation of up to 300 euros (195,000 CFA francs) depending on the region involved. Before that, the startup signs contracts with producers. This requires an assessment of climatic conditions by satellite image.
The OKO, for example, calculates the germination period and precipitation for risk estimation in different agricultural areas. Then it sets the optimal prices. The operation costs 10 euros per hectare and guarantees, in case of a claim, payment of up to hundreds of euros per hectare. Everything will depend on the severity of the losses and the area of the damaged crops. Currently, fintech is only concerned with fields of corn, millet, sorghum, sesame, and cotton.
Mobile application to facilitate access to services
In order to facilitate the relationship with farmers, OKO has developed a mobile application and programming interface that allows access to its online services from any mobile phone. For producers who rarely have access to the Internet, the startup has prepared a USSD code. His agricultural advice provided policyholders with more knowledge to implement better production practices. Today, it has approximately 15,000 clients in Mali and Uganda, the only two countries in which it operates.
In 2021, OKO raised 1.2 million dollars (600 million CFA francs) thanks to its good results and the potential it offers. This funding round is strengthening its presence with smallholder farmers in Mali and Uganda. It will also enable it to expand its activities to include Côte d’Ivoire, Madagascar and Cameroon. The startup is currently considering incorporating other crops as well as locust damage into its portfolio of claims.