Malawi: Nico Satisfied With Response From Tobacco Farmers
Mzuzu – National Insurance Company (NICO) says it is overwhelmed with response tobacco farmers have shown by joining the company’s Mtetezi Insurance Scheme.
NICO Assistant General Manager, Master Mbale, expressed the sentiments in Mzuzu on Friday during a meeting with stakeholders in the tobacco industry.
Mbale said as a back bone of the economy in the country which brings forex, there is great need to insure tobacco to avoid loss.
He observed that the farmers’ good response to the insurance cover emanates from NICO’s ability to compensate farmers who face uncertainties with their tobacco crop.
Mbale said every farmer who faced uncertainties with the crop has been compensated accordingly.
Tobacco is a major foreign exchange earner and backbone of the country’s economy which contributes up to 61 per cent of total merchandise exports and employs a reasonable section of the country’s population.
Mbale, however, said the crop’s production is a risky business as farmers face a variety of natural, social and market-related risks.
“Given the uncertainty of their income each year, tobacco farmers must constantly worry about their ability to repay debts, meet overhead costs, and in many cases, even their ability to meet living costs of their families,” Mbale explained.
He also worried over the fact that most financial institutions shy away from disbursing loans to small scale tobacco farmers who, unfortunately, form a bulk of the country’s tobacco farming community.
In the past, attempts were made to assist tobacco farmers to get loans from commercial banks without necessarily having to use buyers as collaterals but it did not work, according to the NICO official.
He said that is why NICO encourages farmers to be insured with the Mtetezi Insurance Scheme which serves as surety to tobacco farmers on the loans advanced to them by financial institutions.
The facility (Mtetezi Insurance Scheme) covers the farmers in case of accidental damage, loss or theft of their tobacco leaf.
Mtetezi is NICO’s package policy that protects tobacco farmers against loss or damage to the growing tobacco in the field as a result of hail, windstorm, floods and physical action of excessive rainfall.
One of the participants at the meeting, Yotam Nyoni, who works for Opportunity Bank, also expressed satisfaction with the Mtetezi cover facility, saying it acts as collateral when a farmer wants to get loan from the bank.
He said objectives of NICO General’s Tobacco Mtetezi cover blends well with objectives of his bank (Opportunity Bank), which is to help tobacco growers in the country.
Mtetezi Insurance Scheme was introduced in 2010 after the company (NICO) realized that there was no insurance agency in the country that offered an insurance scheme to tobacco farmers. Enditem