Green Climate Fund Invests $20 Million in Kshema General Insurance

Kshema General Insurance has raised $20 million from the Green Climate Fund (GCF) to expand crop insurance coverage in India. The GCF, set up under the Paris Agreement, is a global fund that supports projects related to climate adaptation and mitigation. 

The investment is part of a project called “Harnessing Insurance for Climate Resilience in Indian Agriculture.”

Objective

The funding plans to offer better protection to small and marginal farmers who face frequent climate-related losses. These farmers account for about 86% of India’s agricultural population, most of whom remain outside formal insurance coverage. 

The project intends to reduce the financial impact of extreme weather events such as droughts, floods, and irregular rainfall on their livelihoods.

Utilisation of Funds

The funds will be used to increase Kshema’s ability to underwrite crop risks that arise from climate fluctuations. The company plans to extend insurance access to currently uninsured regions and farmers, particularly in rural and semi-urban areas. The investment will also help strengthen its operational and data systems for managing agricultural risk.

Technology Integration

A part of the capital will go towards improving the company’s digital platform, the Kshema Cognitive Engine. This system provides services such as weather alerts, crop health data, and information that can assist farmers in managing risk. The technology will be used to offer customised insurance products and to support decision-making at the farm level.

Institutional Collaboration

The project has been developed with the involvement of the Ministry of Environment, Forest and Climate Change, the National Bank for Agriculture and Rural Development (NABARD), and the Insurance Regulatory and Development Authority of India (IRDAI). It is aligned with ongoing national plans to improve insurance inclusion under the “Insurance for All by 2047” initiative.

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Conclusion

The $20 million investment from the Green Climate Fund will help Kshema General Insurance expand insurance coverage and improve financial protection for India’s small and marginal farmers affected by changing climate patterns.

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