THE Marsabit district in rugged northern Kenya is the size of Ireland. It has ten tribes and seven languages but only 160,000 people. The manager of the local branch of Equity Bank says it takes two crunching days of driving his jeep through burning deserts to reach some of his customers. In colonial days the district was dismissed by the British as a wasteland. People in the capital, Nairobi, 600km (372 miles) away, still think the description fits.
Marsabit depends on cattle, camels, sheep and goats, to be sold or eaten as needs be. But for several reasons—perhaps climate change, certainly population growth—livestock losses have risen in recent years. The district has been hit by four severe droughts since 2000. The one last year killed off a third of domestic animals, a massive loss of capital.
The International Livestock Research Institute in Nairobi wants to lessen the damage by offering herders insurance for their animals. The standard types of insurance are too costly. So the institute has come up with a model that makes use of satellite data on vegetation. When rainfall and forage drop below a level that has in the past killed the animals, policyholders would be paid. The system is imperfect but cheap, and hard to defraud. A cow’s value is set at $200, a camel’s at $280. Herders pay 3-5% of their worth in annual premiums, depending on past rainfall data on the land they graze. The economist running the scheme, Andrew Mude, says it could pay its way. With tweaking to cater for varying local conditions, he thinks it can be extended across dry bits of Africa.
Once a herder has insurance, banking becomes much easier. A policy may serve as collateral on a loan, helping a herder to move from subsistence to commercial stock-rearing. What is striking in such a poor area is that there is cash to pay for the insurance. One man who gets food handouts insured 50 cows on the spot with the equivalent of $325.
Sceptics doubt that predicting the weather more accurately will make herders more efficient. Nor would insurance cover losses from cattle raiding. Status in pastoral communities is still judged
by the number rather than the quality of animals. And a girl from the Rendille tribe usually costs her bridegroom’s family five cows. Herders still tend to keep more animals than their desolate
land can bear.