Workstream 2:
Action & Implementation

Enable effective action and implementation of high-quality Climate and Disaster Risk Finance and Insurance solutions in poor and vulnerable countries

InsuResilience Investment Fund / Kashf Foundation - Climate insurance for women in Pakistan

by the Kashf Foundation

The Kashf Foundation is a non-banking microfinance organization that has grown to become the largest distributor of microinsurance solutions in Pakistan. Kashf has a strong social focus on female entrepreneurs and used the InsuResilience Investment Fund’s (IIF) debt investment to grow its livestock loan product bundled with a livestock insurance that includes climate event perils. With an average loan size of USD 400, Kashf has disbursed approximately 15,770 loans since 2018 to women. These loans have provided access to climate-linked insurance to over 90,000 beneficiaries.

Country Background

Over the past several years, Pakistanis have experienced the devastating effects of climate change. Catastrophic floods have increased in frequency and displaced millions. Severe droughts, most notably in the province of Baluchistan, have caused significant damage. People who live in poverty in Pakistan are hardest hit by climate change as they are more dependent on natural resources and have less capacity to adapt to a changing climate.

The agriculture sector plays a central role in Pakistan’s economy. It represents 18.9% of GDP and employed 42% of the country’s labour force in 2017/2018¹.

Moreover, agriculture represents the main source of revenues for 74% of economically active women². The livestock subsector accounts for 59% of the agriculture GDP and is mainly raised by around 8.5 million small farmers and landless families in rural areas, particularly women.

Severe weather adversely affects livestock production directly due to heat stress or indirectly due to changes in the overall ecosystem. Some impacts may include reduced agricultural productivity, deteriorated health due to the shortage of feed resources, deteriorated water quality and disease prevalence.

Project description

In September 2018, IIF made its first investment in the Kashf Foundation. Kashf provides microfinance services under an individual lending methodology to low-income households and small-scale entrepreneurs, especially women (over 99% of Kashf’s clients are women). As of March 2020, the foundation has 28% of its portfolio in agriculture.

At the time of the IIF investment, Kashf had recently launched a pilot product to finance livestock for farmers with a multi-risk insurance component that included coverage when natural catastrophes occur. The pilot was done in one of Kashf’s branches and the foundation’s goal was to introduce it in all existing rural branches and set up new rural branches.

IIF financing was directed to expand the portfolio of livestock loans with a climate insurance component to farmers. Kashf used this funding to launch the livestock product in 22 branches across the province of Punjab. With an average loan size of USD 400, Kashf has disbursed approximately 15,770 loans since 2018 to women. These loans have provided access to climate-linked insurance for over 90,000 women. During this time, they have settled 84 insurance claims on livestock through their partnered insurance company.

The livestock loan, known as the “Kashf Mahweshi Karza” carries a compulsory insurance, which covers the cost of repayments should the animal fall die or be stolen.

The payouts enable the farmers to purchase new animals and prevent them from defaulting and thereby accruing a poor credit rating. This type of safety net is important in the face of climate change, as increases in drought, flooding and disease affect livestock mortality rates.

By attaching insurance products to loans, lenders can increase their ability to offer loans to poorer and more climate-vulnerable people. When payments are made, the organization makes a personal visit to the farmer, discussing with her how she will reinvest the money, which in turn demonstrates to others in the community that the product is beneficial. 

Following the launch of the livestock insurance product, Kashf also identified several challenges in order to further scale the product. Some of the challenges identified were providing adequate education to the sales team and publishing brochures for the client so they can understand the benefit of a loan bundled with insurance. 

Going forward over the next two to three years, Kashf plans to target 300,000 beneficiaries. The product will also be converted into an Islamic financing product (designed in accordance with Islamic law and Sharia) in order to cater to the full target market.

Nadia Rubaa, a livestock loan customer, said that she has seen significant improvements in her quality of life as a result of both the loan and insurance. She recommends Kashf as a company because:

“The loan is easy to get. Even if we are not able to pay instalments on time, they do not pressurise us. People working in Kashf are very caring and helping.”

She was able to use the loan in order to purchase a cow and when her cow died she received a payout for her claim immediately. She believes that if she not had this insurance, she would have required a new source of income to support her family and would now be willing to purchase livestock insurance even if it was not linked to a loan.

Covid-19 impact and response

In response to the initial outbreak in March, both the federal and provincial governments implemented a range of measures to contain and mitigate the spread of the virus. These included quarantines in localized areas, border closures with neighbouring countries, international travel restrictions and varying levels of lockdown in cities and provinces across the country.

Kashf completed a thorough research investigation into the Covid-19 impact on different sectors and client profiles to identify borrowers who lost their main source of income due to the shutdown of businesses during the pandemic.

 During the lockdown, only 6% of surveyed borrowers responded that their income had not been affected by the lockdown measures while 67% claimed that they would not be able to make repayments on their loans. Kashf therefore proactively offered a 30-day credit moratorium to all of its borrowers in April without any penalties being applied.

Summary Table

Risk(s) to be covered
Climate shocks
Livestock loan product bundled with a livestock insurance that includes climate event perils
Increasing the resilience of the livelihoods of poor and vulnerable households in rural areas and enhancing gender equality.
Approximately 60,000 beneficiaries
Global Partnership
Members and their
partner organizations/
The Insuresilience Investment Fund, the Kashf Foundation

Climate and Disaster Risk Management

Placement of this project along the climate and disaster risk continuum:

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