Blockchain Powered Index Insurance Distribution Platform

The World Bank estimates that up to 65% of adults in Sub-Saharan Africa (SSA) remain unbanked, with limited access to financial services such as credit and insurance. Small-scale farming communities are particularly affected, as the agricultural sector only receives 4% of loans from commercial banks, despite contributing around 35% of SSA's GDP. This lack of formal funding means that 450 million smallholder farmers, who produce up to 70% of the subregion's food, have limited resources to withstand financial shocks and the effects of climate change.

The underdevelopment of financial markets in SSA’s rural economies is largely due to high transaction costs associated with serving small-sized farms, client remoteness, a lack of usable collateral to secure credit by small-scale farmers, and poor communication and transportation infrastructure. Moreover, the rural market presents a significant challenge for financial institutions seeking to penetrate this sector. The lack of education and financial literacy among rural populations limits their ability to understand and adopt financial products and services.

Index insurance has been promoted as a potential catalyst for the development of rural financial markets and a viable risk transfer mechanism for smallholder farmers, particularly in the face of climate change. Unlike traditional indemnity-based insurance, index insurance offers coverage based on a predetermined index, reducing administrative costs and pay-out delays associated with loss verification. However, its uptake among smallholder farmers in SSA remains modest. On the demand side, obstacles hindering the uptake of index insurance include low demand by smallholder farmers. Only 3% of smallholder farmers in SSA have access to agriculture insurance, which is far below the rates in Asia (46.2%) and Latin America (15.8%). In addition, smallholders are not fully aware of how agricultural insurance can mitigate risk exposure and perceive insurance products as expensive with insufficient coverage and long claim cycles. Additionally, a lack of trust exists due to delayed or defaulted pay-outs from insurers.

On the supply side, the most common barriers are high start-up costs, and the absence of economic support from the government. Other constraints include the difficulty in transferring covariate risk to the international reinsurance market and the fact that policies are distributed by intermediaries who lack the infrastructure to scale the product at a low cost and effectively track real-time weather data. Furthermore, the shortage of automated weather stations in rural areas, leading to poor data quality and the possibility of basis risk, adds to the financial unfeasibility for insurance companies that depend on conventional methods for distribution, pricing, and claim handling to safeguard smallholders from catastrophic climate events.

Our proposed solution is a blockchain-powered platform for index insurance distribution, which aims to improve the uptake of insurance and enhance small-scale farmers' ability to withstand the effects of climate change. By leveraging the transparency and efficiency of blockchain technology, we seek to address the barriers to adoption, including affordability and contract complexity. This platform will promote financial inclusion and contribute to the development of financial markets in rural economies, ultimately benefiting smallholder farmers and the wider community.

Our solution is a blockchain-powered index insurance distribution platform that will have a direct and meaningful impact on farmers as it will streamline the enrolment process for index insurance. Instead of requiring farmers to complete lengthy application forms, farmers can use both centralized and decentralized digital solutions to customize policies that suit their needs. Insurance policies are automatically generated as a result. Our unique hybrid approach enables us to cater to the specific needs and constraints of farmers, whether they possess mobile phones or not. We leverage digital solutions to register farmers on our blockchain-powered platform, creating a unique digital farmer ID for each farmer that is linked to a smart contract, providing transaction transparency and an immutable record on the blockchain.

For farmers without phones, registration for insurance can be done through our network of participating agents, such as agro dealers, via our agent app. The participating agents assist farmers in selecting and purchasing the insurance policy that best suits their needs, expanding insurance accessibility and widening our potential customer base. In case of any insurable losses, farmers are notified through various channels, and pay-outs are automatically transferred to participating agents in different localities, allowing farmers to redeem their pay-outs using their farmer IDs.

Farmers with phones can use digital channels such as our mobile app, USSD system or WhatsApp chatbot to customize their policy and select specific risks they want to insure against. The digital channels provide personalized recommendations based on the farmer's location, crops, and historical weather data. Through our multiple distribution channels, we also provide transparency on how the index is calculated and up-to-date information on the risks being insured against allowing farmers to track the status of their claims and receive real-time updates. This can help build trust and encourage more farmers to enroll in the insurance program. Farmers also receive timely SMS notifications throughout the process to maintain a strong customer relationship and reduce the risk of lapses in premium payments. For both farmers with phones and without premium payments are made directly to the insurer, with suitable payment plans agreed upon in consultation with the insurance provider.  

Both farmers with phones and those without are given the option to receive inputs instead of cash pay-outs, increasing accessibility, convenience, and potentially improving agricultural practices and customer retention. 

As part of our solution, we also provide advisory services to insurers and insureds, collecting and disseminating relevant data using our blockchain technology to inform the design of insurance products tailored to meet the needs of farmers. Farmers will have access to an AI-powered chatbot for financial and risk advisory services on index insurance and how to reduce their risk exposure. Additionally, actors in the agricultural value chain can advertise their services and products through our digital channels, allowing us to monetize the platform.

Our focus is on assisting smallholder farmers in Sub-Saharan Africa (SSA). A study carried out in 2020 on 241 smallholder farmers who had received insurance from ACRE Africa revealed that nearly 45% of them were unhappy with the insurance provider. Their dissatisfaction was due to several reasons such as insufficient communication about claim status, slow insurance pay-outs, and a lack of follow-up after registration. Other agriculture insurance firms in SSA face comparable obstacles, which limit insurance adoption, as evidenced by the subregion's low demand for agricultural insurance among smallholder farmers. Generally, smallholder farmers are unaware of how agricultural insurance can help them mitigate risk, and they see insurance products as expensive with inadequate coverage and lengthy claim cycles, making it difficult to justify their value. Moreover, a lack of trust exists due to late or defaulted pay-outs from insurers. On the supply side, the fact that policies are distributed by intermediaries who lack the infrastructure to scale the product at a low cost and effectively track real-time weather data, is among the reasons that limit the penetration of index insurance in SSA. These obstacles are addressed by our solution, which is outlined in our value proposition as follows:

Reduced claim cycles and transaction costs: By utilizing smart contracts on a blockchain, the claims process will be automated, resulting in shorter claim cycles. The smart contract will be designed to automatically trigger the payment of an insurance claim once certain conditions are met. This results in a reduction in transaction costs, and in the long run, lower premium costs for users.

End to end service: We position ourselves as the smart middleman that offers proactive administration and follow-up services to ensure that farmers stay insured and that their policies remain up to date, allowing our customers to focus on their farming activities without worrying about the details of their insurance policies.

Increased standardization: By creating templates for blockchain-based insurance products, our platform gives farmers and registered agents the tools to create customized insurance products at a lower cost. 

Enhanced Transparency, Demand Side: Integrating real-time weather data tracking with immutable smart contracts allows for systematic and swift verification of insured risks and accurate determination of the likelihood of pay-out. This process also ensures transparency in the index calculation.

Enhanced Transparency, Supply Side: The use of blockchain technology facilitates the creation of a tamper-proof, shared ledger accessible to all parties involved in the insurance transaction, including the insured party, the insurer, and third-party service providers, reducing the potential for disputes and delays in the claims process, as all parties have access to the same information and can quickly resolve any discrepancies. 

Increased Financial Inclusion: Providing unique digital identities to farmers enables them to keep records of their traceable transaction history, which improves their creditworthiness and reputation profile for financial institutions. This enhances their financial inclusion.

Enhanced Climate Change Resilience: Improved access to financial services, enhanced productivity, and better incomes and livelihoods will increase the smallholder farmers' resilience to climate change.

Our team consists of four core members, each bringing a unique set of skills and experience to our work. Stella is the Founder and CEO, as well as our Research and Advisory Services Expert, with a focus on index insurance and climate adaptation strategies for smallholder farmers in Sub-Saharan Africa. With over 7 years of field-based research and consultancy experience in these areas and a PhD in Development Studies from Massey University, New Zealand, Stella is well-equipped to lead our team's efforts.

Munya is our Technical Lead in index insurance and a seasoned technical expert with over 29 years of experience in the insurance sector, 16 of which were spent in agriculture insurance working directly with farmers. His business and IT background, combined with his private sector experience, make him an ideal candidate to handle initiatives related to risk management, insurance distribution, and building scale and efficiency using technology.

Dennis is our Software with over 10 years’ experience. His expertise lies in full-stack development, including knowledge of OOP, C#, Rest APIs, Soap APIs, integrations, MVC, .Net core, and .Net frameworks. Dennis also has working knowledge of Java, PHP, and Python, and has developed applications on Blockchain Core Platforms such as Ethereum, Hyperledger Fabric, and Corda, leveraging smart contracts and distributed ledger technology to create secure and transparent solutions.

Finally, Attra is our Business Development Expert, bringing over 5 years of work experience in claims management and business development to the team. She has a track record of generating new business opportunities by developing relationships within the insurance industry and increasing the profitability of existing product lines. Attra has detailed knowledge of current market conditions and competitors' products. 

As a team, we are well-positioned to deliver our solution for several reasons. Firstly, we have a comprehensive understanding of the challenges smallholder farmers in Sub-Saharan Africa face in accessing affordable and reliable agriculture insurance. 

Secondly, we possess extensive experience and expertise in agriculture insurance, specifically in index insurance. Our in-depth understanding of the local agricultural practices, sociodemographic characteristics of farmers, and market dynamics enables us to tailor distribution channels for index products to the needs of smallholder farmers in the region.

Thirdly, we have a strong proficiency in blockchain technology, which we believe has the potential to significantly benefit the insurance industry, specifically by enhancing transparency, efficiency, and trust in insurance processes. To bolster our knowledge, we seek to collaborate with global blockchain experts.

Fourthly, we have cultivated a robust network of partnerships with local stakeholders, including insurance providers, farmers, agricultural cooperatives, NGOs, and government agencies. We will actively engage with these stakeholders through participatory workshops, focus groups, and surveys to gather their input, ideas, and feedback to refine our solution. 

Our team's diverse background, including expertise in research, agriculture insurance, blockchain, and community engagement, positions us uniquely to develop and deliver a solution that is not only technologically sound but also gender-sensitive, financially inclusive, and community-driven, empowering smallholder farmers, and improving their access to index insurance.

The following key points prove that our solution has progressed beyond the concept stage:

1. Development Timeline: We have been conducting research on our solution for at least 12 months now, and the concept has gone through multiple iterations, refinements, and validation steps to reach the prototype stage. Additionally, the time and effort we have invested into developing the concept into a prototype is a significant step beyond the initial conceptualization phase.

2. Prototype: We have developed a visual prototype/wireframe demonstration of how our blockchain powered index insurance platform would function. 

3. Proven Business Model: As of now, three other projects are piloting blockchain-based index insurance in Africa, and these include, WorldCover, ACRE Africa and the Lemonade Crypto Currency Coalition. These examples demonstrate that our concept is based on a proven business model and shows that there is proven market validation. However, our solution proposes a more disruptive use of blockchain technology in index insurance, which is based on a hybrid model that combines both centralized and decentralized channels of distributing index insurance using blockchain technology. This sets us apart from other projects, which are currently moving towards eliminating the middleman entirely, to relying solely on digital channels. Thus, we position ourselves as the smart middleman as we are the only ones using a hybrid approach which leverages multi-distribution platforms. We believe an entirely digital approach has limitations in SSA which has a 45% mobile penetration rate and can exclude some farmers who do not have access to technology or prefer face-to-face interactions. Our platform also stands out as the only one designed to issue farmer IDs and record farmer transaction histories. Our other competitive edge over other insurance providers is that we will be conducting a prototype test with the Agro Consortium in Uganda. This consortium comprises 13 insurance companies in Uganda, many of which operate in other countries across East, West, and Southern Africa. Once we demonstrate the benefits of our products to these companies, we can easily expand to other African markets. As such, we are seeking funding to test our prototype to validate its functionality, usability, and effectiveness. 

The solution is not yet serving anyone.

We are confident that Solve will offer us a wide range of expertise, resources, and networks to help overcome potential financial, technical, legal, cultural, and market barriers that our team are facing in implementing our blockchain powered index insurance distribution platform. By leveraging the support and guidance of the Solve community, our team can potentially accelerate the development and success of our solution.

Business Model: Solve can provide advice and mentorship on product-market fit, business strategy, and development to help our team refine our business model and ensure it aligns with market needs. Solve can also connect our team with potential partners who can support our platform's development and growth.

Financial: Solve will provide us with guidance on accounting practices, financial management, and pitching to investors. Solve can also potentially connect us with investors or funding opportunities that can help overcome financial barriers and support the financial sustainability of our platform.

Human Capital: Solve can connect us with a network of experts and mentors who can provide guidance on building a skilled team and optimizing human capital for our  platform's success.

Legal or Regulatory Matters: Solve can provide expertise and guidance on legal and regulatory matters related to blockchain technology, insurance, and data privacy, and connect us with legal experts who can help navigate the complex legal landscape and regulatory requirements relevant to our platform.

Monitoring & Evaluation: Solve can provide guidance on collecting and using data for monitoring and evaluation purposes to measure the impact of our platform. Solve can also connect us with data experts who can help design effective monitoring and evaluation frameworks to demonstrate the effectiveness of our platform.

Product/Service Distribution: Solve can provide advice on delivery, logistics, and expanding our client base, and can connect us with experts in product/service distribution and marketing to help optimize our distribution strategies and expand our reach to target markets.

Public Relations: Solve can provide guidance on branding and marketing strategies, including social and global media, to help raise awareness and promote our platform. Solve can connect us with experts in public relations and marketing who can help create a strong brand presence for our platform.

Technology: Solve can provide expertise on software/hardware, web development, and design to help optimize the technological aspects of our platform and connect us with technology experts who can provide guidance on developing and implementing the right technological solutions for our platform's success.

Our solution has several innovative features and potential for broader positive impacts. which can revolutionize the agricultural insurance landscape in Sub-Saharan Africa by providing an innovative, transparent, and accessible solution for smallholder farmers. 

Firstly, our solution leverages blockchain technology to enhance transparency, security, and trust in the insurance process. The immutable nature of blockchain ensures that all transactions and data are recorded in a transparent and tamper-proof manner, reducing the risk of fraud and increasing trust among stakeholders. This is particularly important in Sub-Saharan Africa, where issues such as lack of trust, limited access to financial services, and unreliable record-keeping systems often hinder financial inclusion.

Secondly, our solution incorporates multiple distribution channels, such as a mobile app, USSD system, WhatsApp Chatbot, and a digital app for registered agents, enabling farmers to digitally enrol in index insurance, ensuring smooth enrolment on the blockchain and effortless claims administration through the use of technology. This makes insurance products more affordable and accessible to smallholder farmers who may have limited literacy or numeracy skills.

Thirdly, our solution promotes financial literacy and education among smallholder farmers through multiple distribution channels, including an advisory Chatbot. By offering these services, farmers can better understand insurance products, risk management, and financial planning, contributing to their long-term financial well-being and empowerment.

Fourthly, through blockchain technology, our solution creates a holistic approach to addressing the financial inclusion challenge, integrating with existing agricultural value chains to leverage data and insights. This allows us to offer tailored insurance products, credit options, and other value-added services to smallholder farmers. Our innovative approach can create a positive ripple effect in the market, encouraging other players to adopt similar approaches and contribute to a more inclusive agricultural ecosystem.

Overall, our solution has the potential to spur innovation and competition in the insurance market, resulting in a more inclusive and accessible environment. As a result, traditional insurance providers may be motivated to enhance their offerings to stay relevant in the face of our disruptive solution, leading to greater innovation, customisation, and affordability of insurance products for smallholder farmers. Access to affordable insurance can help these farmers manage risks associated with weather, pests, diseases, and market fluctuations, ultimately promoting increased investment in agriculture, improved productivity, and better access to financial services such as insurance, credit, and savings. This, in turn, can empower smallholder farmers to participate in formal value chains, stimulating rural development. Additionally, the improved resilience of smallholder farmers to climate change is a crucial benefit of the innovativeness of our solution.

Impact Goals for the Next Year:

1. Increase the adoption of index insurance among farmers in Sub-Saharan Africa by 10% through the use of blockchain technology and multiple distribution channels.
2. Improve the enrolment process for index insurance by reducing barriers and streamlining the application and verification process, resulting in a 30% increase in the number of insured farmers for our clients.
3. Provide real-time information about insured hazards and pay-outs to farmers, resulting in repeat policy enrolment and improved risk management.
4. Issue unique digital identifiers to 100% of the farmers, enabling them to access financial services and the chance to build a digital financial reputation.

Strategies to Achieve Impact Goals in the Next Year:

1. Conduct extensive outreach and education campaigns to farmers, highlighting the benefits of index insurance, including transparency, convenience, and financial inclusion.
2. Collaborate with insurance partners to simplify and digitize the enrolment process, leveraging blockchain technology to ensure transparency and efficiency.
3. Develop and implement a robust system for real-time data collection and sharing, enabling farmers to access up-to-date information about insured hazards and pay-outs through the platform.
4. Implement a digital farmer ID system, leveraging blockchain technology for secure identification and authentication, and working with local authorities to ensure widespread adoption.

Impact Goals for the Next Five Years:

1. Increase the overall insurance coverage among farmers in Sub-Saharan Africa by 50% through the widespread adoption of index insurance multiple distribution channels and blockchain technology.
2. Improve financial inclusion for 100% of the farmers we serve by providing them with access to insurance, savings, and other financial services through the platform.
3. Empower women in agriculture by developing a women's empowerment index and promoting gender-inclusive insurance policies, resulting in increased participation and economic empowerment of women farmers.
4. Create a positive social impact by reducing the reliance on government subsidies for disaster relief, reducing the burden on public finances and promoting sustainable risk management practices among farmers.

Strategies to Achieve Impact Goals in the Next Five Years:

1. Scale up the platform to reach a larger number of farmers and expand to more countries in Sub-Saharan Africa, leveraging partnerships with local stakeholders, governments, and NGOs.
2. Continuously improve the platform's features, usability, and security, based on user feedback and technological advancements, to ensure it remains relevant and effective in meeting the needs of farmers and insurers.
3. Conduct research and data analysis to measure the impact of the platform on farmers' lives and use the findings to advocate for policy changes and promote the adoption of index insurance as a viable risk management tool.
4. Collaborate with insurance partners, agricultural experts, and women empowerment organizations to develop and implement a women's empowerment index that addresses the specific needs and challenges faced by women farmers.
5. Foster strategic alliances with financial institutions, microfinance organizations, and other stakeholders to promote financial inclusion and develop innovative financial products, such as the wallet function, that cater to the unique needs of farmers in Sub-Saharan Africa.

Our approach is designed to address several Sustainable Development Goals (SDGs). We aim to  monitor our progress and impact, against a range of indicators, in the following areas:

SDG 1: No Poverty – Target 1.1, Indicator 1.1.1 and Target 1.2, Indicator 1.2.1:  Through our solution we hope to reduce the number of smallholder farmers in Sub-Saharan Africa who are living below the international and national poverty lines.

SDG 2: Zero Hunger – Target 2.1, Indicator 2.1.2, Target 2.3,  Indicator 2.3.2 and Target 2.4, Indicator 2.4.1: Through our solution we hope to improve food security at the household and national levels. We also hope our solution will improve the average income of small-scale food producers including women farmers, and the proportion of agricultural land under sustainable agriculture in rural areas in Sub-Saharan Africa.

SDG 5: Gender Equality – Target 5a, Indicator 5.a.1 and Target 5b, Indicator 5.b.1: Through our solution, we hope to empower women farmers economically, so they can afford to purchase or rent small parcels of land via the land market. This is because, the current land tenure systems in most countries in Sub-Saharan Africa restrict women from making decisions over customary land. We also hope our solution will enable more women farmers to gain access to mobile phones and other forms of technology.

SDG 9: Industry, Innovation, and Infrastructure – Target 9c, Indicator 9.c.1: We hope that our solution will result in the proliferation of mobile phones, mobile money, and the use of other digital technologies in the rural areas we serve.

SDG 10: Reduced Inequalities – Target 10.1, Indicator 10.1.1 and Target 10.2, Indicator 10.2.1: We hope that our solution will be able to improve the household expenditure including female headed households (FHHs), and income per capita among the bottom 40% of the population and the proportion of people living below 50% of median income, including women farmers.

SDG 13: Climate Action – Target 13.1, Indicator 13.1.2 and Target 13.3, Indicator 13.3.1: We hope to improve the resilience of smallholder farmers, so they are better prepared to cope with the adverse effects of climate related disasters. Through our advisory services, we hope to raise awareness of risk layering including agriculture insurance to improve the ability of smallholder farmers to manage risk. 

SDG 17: Partnerships for the Goals – Target 17.7, Indicator 17.17.1: We plan to collaborate with stakeholders from the public, private, and civil society sectors by leveraging our solution. By doing so, we aim to raise additional funds through these partnerships and provide better index insurance solutions to smallholder farmers in Sub-Saharan Africa.

These indicators will enable us to determine our effectiveness in reducing poverty and increasing the productivity and income of small-scale farmers, particularly women who face more gender inequality and financial exclusion. Altogether, the number of farmers we enroll for index insurance and offer support to access financial services will demonstrate our contribution to achieving SDGs by 2030.

Our solution leverages blockchain technology, Big Data, and multiple distribution channels, such as a mobile app, USSD and SMS system, and WhatsApp Chatbot. 

Blockchain is a distributed digital ledger technology that enables secure and transparent transactions between multiple parties. The digital ledger maintains a continuously growing list of records, called blocks, that are linked and secured using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Once a block is added to the blockchain, it cannot be altered or deleted, making it highly resistant to tampering and fraud. Our use of blockchain ensures transparency, security, and immutability in recording all transactions and data related to index insurance. Additionally, it facilitates the creation of smart contracts and farmer digital IDs, which maintains a tamper-proof record of farmers' identities and transaction history.

With the use of Big Data, we will collect and analyze a wealth of information, including weather patterns, historical crop yield data, market prices, and farmer socio-demographic data. We will leverage this information to develop risk profiles for different regions and crops, which will inform the design of insurance products that are best suited to the specific needs and risks faced by smallholder farmers. Advanced data analytics techniques, such as machine learning algorithms, will be utilized to assess the risk profiles of farmers and determine appropriate insurance coverage and premiums.

Our mobile app and WhatsApp Chatbot channels provide farmers with mobile phones access to insurance products and other financial services. Through these channels, farmers can easily register for insurance, submit claims, and view their payouts. The USSD and SMS systems allow farmers without smartphones or internet access to enroll for insurance using their phone credit. Additionally, the SMS system can disseminate information and alerts to farmers with phones, including those without access to smartphones or the internet. Our agent app enables registered agents to digitally enroll farmers without mobile phones for insurance.

To integrate blockchain technology with our insurance solution, we will develop an API that links the blockchain platform with our different channels, including the mobile app, USSD system, WhatsApp Chatbot, and Agent app. This integration guarantees that all transactions, such as farmer registration, premium payments, and payouts, are recorded and securely stored on the blockchain. 

Although this is not one of our core technologies, farmers can access an AI-powered chatbot through certain digital channels for financial and risk advisory services on how index insurance works and how to reduce their risk exposure.

Incorporating diversity, equity, and inclusivity is crucial for creating a positive and inclusive work environment that fosters innovation, creativity, and productivity in our business.  As a diverse team, we recognize the significance of diversity, equity, and inclusivity in the workplace not just a moral imperative, but also as a strategic business decision that promotes diversity of thought and helps attract and retain top talent. Thus, we are committed to ensuring that diversity, equity, and inclusivity are integrated into the company's core values, policies, and practices. 

We are also committed to implementing inclusive hiring practices to attract diverse talent and creating policies that promote diversity and equity in promotions, pay, and opportunities for growth. This includes retaining diverse talent through creating an inclusive and supportive work environment that values and respects differences. Thus, we will give everyone equal opportunities regardless of their gender, race, disability, religion, ethnicity, and sexual orientation. This extends to the different clients that we work with, including farmers, insurance providers, microfinance institutions and agro dealers.

To cultivate an inclusive organizational culture, we will provide Diversity and Inclusion training to all employees to raise awareness, enhance understanding, and foster inclusive behaviors. Training will be ongoing and updated regularly to ensure continuous learning and improvement. We will further create Employee Resource Groups (ERGs) that provide a supportive network for employees from diverse backgrounds, and help promote inclusivity, mentorship, and professional development opportunities.

As we believe in constantly improving our processes and systems, our organization will foster inclusive communication and feedback channels, where employees feel comfortable sharing their ideas, concerns, and feedback. Hence, we will actively seek feedback from employees to identify and address any diversity, equity, and inclusivity challenges or opportunities for improvement. Based on employee feedback, we will regularly review and update policies and practices to ensure they are aligned with best practices and promote diversity, equity, and inclusivity. We are committed to monitoring progress and making necessary adjustments as needed.

Our strategy for becoming financially self-sufficient as an index insurance distribution platform business is multifaceted and includes a variety of revenue streams to supplement cash-flow and guarantee long-term viability:

1. Investment Capital and Grants: To develop and improve our technology platform, expand our operations to new markets, and increase our outreach to smallholder farmers, we are seeking investment capital and grants through impact investors, venture capitalists, angel investors, and non-equity funders that align with our social mission and business model. We are, however, more inclined to apply for grants rather than investment capital because the former usually requires repayment with interest or equity ownership in the business, whereas grants provide funding without the burden of debt, allowing businesses to retain more ownership and control over their operations.
2. Technology Service Fees: Our blockchain technology would be a key differentiator in our business model which can generate the business money through license fees for other parties in the agriculture insurance ecosystem to use our proprietary blockchain technology. We can also charge transaction fees for other services that rely on our blockchain technology.
3. Commission from selling insurance premiums: The commission charged for selling premiums to farmers on behalf of insurance companies would also contribute significantly to our revenue.
4. Data monetization: We would monetize data through data analytics, insights, and other value-added services. Reliable data is the issue that many index insurance providers in Sub-Saharan Africa struggle with, which lowers the standard of their indexes and increases basis risk. Value added services could include coverage analysis. We can charge for an in-depth review of farmer insurance needs which would entail examining clients' existing insurance policies, detecting coverage gaps, and providing recommendations on how to improve insurance products targeted to farmers' specific needs.
5. Consultancy and Advisory services: We would charge consulting and advisory fees to insurance providers, governments, development organizations, and other actors in the agriculture ecosystem based on our high impact research in core areas such as financial inclusion, closing the gender gap in insurance, risk management, climate adaptation financing, and environmental sustainability.
6. Advertisements: Agro dealers, insurance companies, microfinance organizations and other potential clients would be charged fees for using our farmer app Jabali to advertise their goods and services. We would create different advertising packages tailored to the needs of each client, which include different levels of visibility, such as banner ads, sponsored content, or featured listings, as well as options for targeting specific user segments or geographic locations. 
7. Diversification of Products and Services: To create more revenue streams, we would look into ways to diversify our product and service offerings. Examples of our diversification portfolio include an e-wallet service which would charge a minimum service fee to farmers. Another non-core service that we could charge for is tracking loan repayments for MFIs on a commission basis.

Our startup has used the past year to develop our concept and create a visual prototype. We are now seeking grants and investment opportunities to build a testable prototype and prove its functionality, usability, and effectiveness. Despite being a new startup without an extensive financial history, we have conducted thorough market research and identified a gap in the market that our blockchain-powered index insurance platform can fill.

Our platform has significant potential in Sub-Saharan Africa which has at least 450 million smallholder farmers, out of which only 3.5% have agriculture insurance. Furthermore, the global parametric insurance market is projected to grow at a CAGR of 9.9% from 2022 to 2031, with a value of $11.7 billion in 2021, and an estimated $29.3 billion by 2031. We have developed a unique value proposition and competitive advantage to secure a substantial market share starting in Sub-Saharan Africa.

We have projected our revenue streams and created realistic scenarios to ensure financial sustainability. Our primary source of revenue for the next two years will be from commissions on selling insurance premiums and administering policies. For example, if we sell 160,000 policies over two years, our commission earnings will be $88,000, and our administration costs will be $132,000. This generates a total earned revenue of $220,000.

We will also use multiple revenue streams, including technology service fees for our blockchain ledger, data monetization through data analytics, advisory and consultancy services, and diversification of services and product offerings (for example through developing an e-wallet system). We have also developed plans to reduce costs and increase operational efficiency without compromising quality. Our experienced and talented team brings expertise from various backgrounds, including index insurance, software development, and blockchain technology, which we believe will help us achieve financial sustainability.

While we do not have concrete examples of financial sustainability yet, we are committed to tracking our financial performance and making data-driven decisions to continuously improve our operations. We are confident that with our sound business plan, experienced team, and commitment to success, we can achieve long-term financial sustainability.

ENAGMA is registered in Zimbabwe but from our market research in the previous year, we have observed that the country is not market ready. Zimbabwe is still at pilot stage for weather index products and is only starting to carry out feasibility studies for area yield index insurance. Therefore, we will be testing our prototype in Uganda where more pilot projects for index insurance have reached scale. We will also re-register the company in Uganda given that three out of four team members are presently located there.