Brenden McKinney is a former McGill student who majored in economics and took INTD 200 (Introduction to International Development) in Fall 2016. Brenden is the co-founder of Zua, a microinsurance initiative operating in Zambia since 2017. He has worked as an investment banking analyst at Goldman Sachs and will be working at McKinsey in Washington, D.C. from April 2019. The following is an excerpt of an interview that Professor Kazue Takamura conducted with Brenden in Montreal in February 2019.
Could you tell us about the background of Zua?
Zua provides index-based crop insurance to subsistence farmers in sub-Saharan Africa. Zua’s central goal is to limit agricultural risk for low- income farmers. Zua addresses the cycle of poverty that is experienced by female subsistence farmers who are highly vulnerable to climate change and any other types of shock. For the pilot project we conducted in two villages in Zambia between 2017 and 2018, we insured a total of 35 farmers, of which 31 were females and the main breadwinners supporting their children and grandchildren.
The idea of Zua began during my time at McGill. There are a number of former McGill students who have been involved in Zua. My co-founder, Meagan Prins, also studied economics at McGill and currently works at the IFC Asset Management Company, part of the World Bank Group. Both Meagan and I were interested in the question of risk management in an agrarian society; especially how certain risks and uncertainties impede development.
Could you tell us about the condition of the subsistence farmers who Zua supports?
The question of risk is particularly relevant to the communities we work with. Our planholders are largely from female-headed low-income households, many of whom are affected by the HIV/ AIDS epidemic. These female farmers often have small gardens where they would plant maïze and vegetables for subsistence farming. These female farmers are just living with a level of bare survival. For example, one of our planholders, Doreen, who is 60-years-old, takes care of her grandchildren. She rents land. You could easily imagine someone like her, for example, where flooding or drought could be a devastating shock. She has to pay for rent. She has to feed grandchildren. If these subsistence farmers have a bad harvest, they would not have enough to purchase necessary inputs for the next harvest including seeds and fertilizer. Obviously, this situation would lead to another unproductive harvest. The outcomes are that these farmers may have to stop sending their children to school or marry off their young daughters. Offering insurance ensures that even if there were a drought, farmers would be able to prepare – at least buy inputs, for the next harvest. This helps to break the perpetual cycle of poverty.
What are the broader impacts of Zua on these communities?
As a pilot project, we did not charge premiums to our planholders in 2018. Our current idea is to charge a very small amount of premium, just enough for the farmers to understand the mechanism of microinsurance. In November 2018, we went back to the communities to deliver the claim payouts. With the terrible drought last year in Central Zambia, our planholders were able to receive their claims. The claim amounts are in the form of seeds, fertilizers, and pesticides. The idea here is that we want to make sure to invest in the future harvest. We actually debated on whether we should provide cash payouts or input payouts. Our concern was that if we gave cash to the farmers now, the money would not last until the next harvest. So we decided to try input payouts. Our planholders were very happy. They gave us two chickens! The central message here is that although we had a terrible drought, there are the inputs to invest for the next harvest. We hope that this leads to more sustainable outcomes. Kids are remaining in school, daughters are not married off, and farmers would try new seeds in order to increase their productivity.
Do you have any message to McGill IDS students?
If you are really interested in certain research questions that would have a greater impact on communities, first you should assess and understand the local players. And try to build relationships with those local players. Second, you should try to go there, experience for yourself, and assess the viability of whatever you think about. This is very important in terms of getting your feet on the ground. Lastly, do not waste your time. Being a university student, you have so much support from professors and fellow students who may share a similar passion. Do not wait. Use different fellowships that McGill offers. Take advantage of these opportunities and resources.