InsureCow, a startup that ensures Bangladeshi farmers against financial ruin

(July 2024) In rural Bangladesh, the picture should be looking good for smallholder farmers. Demand for livestock and dairy products is growing as incomes rise, but these farmers are facing a daily struggle against poverty and financial insecurity. For generations, farmers have relied on their cattle not just as a source of income, but as living, breathing assets – their lifeline in times of crisis. 

However, the changing climate is making farming conditions tough. Costs are rising, milk production is falling and temperature changes are causing an increase in diseases and parasite infestations. This, combined with poor farm management practices, stemming from inadequate access to information on disease management, balanced feed requirements, and vaccination schedules, is having a dreadful impact on bovine mortality rates.

It all leads to a story that is far too common in Bangladesh's agricultural heartland. When farmers fall ill or livestock die, they turn to the only option available – local moneylenders – and end up getting caught in a debt trap. With little or no savings, Bangladesh’s farmers relied in 2023 on informal loan sharks to borrow an astounding $14 billion USD, often at interest rates exceeding 40%. 

This cycle of high-interest debt and financial vulnerability is a reality for as many 16.6 million smallholder farmers with 26 million cattle across Bangladesh, hampering their ability to invest in their farms and leading to low productivity and persistent poverty. Yet, traditional insurance companies shy away from covering livestock, citing difficulties in identification and high risks of fraudulent claims. As a result, insurance penetration remains abysmally low at less than 0.3%. Close to 10 million of these smallholder farmers cannot access any type of bank service. 

Cattle farmers in Bangladesh can easily get in debt if their animals die

Recognising the dire need for change, local entrepreneur Tasvir A. Faheem envisioned a solution that would leverage technology to break the cycle of poverty. Enter InsureCow, a startup he founded, dedicated to providing sustainable financial solutions for smallholder farmers. 

"We saw farmers trapped in a system that was failing them," Tasvir explains. "Our goal was to create a platform that would not only provide asset security but also take a systematic approach to ensure farmers get access to formal financial services, farming assistance, vaccination schedules, and affordable insurance products for both farmers and livestock."

InsureCow's innovative approach centers on an AI-powered bovine biometrics engine. This technology creates a unique digital identity of the muzzle for each animal, much like a human fingerprint. Gone are the days of easily tampered ear tags or unreliable branding methods. With InsureCow, each cow's tamper-proof identity is securely recorded and verified, transforming livestock into trackable digital assets through AI Digital Twins technology.

A cattle farmer (center) signs up for InsureCow coverage. Company founder Tasvir Faheem is on right, InsureCow's COO Nurunnassa Choudhury sits left. 

Using the identity technology Tasvir’s team built the InsureCow app and connected marginal farmers with insurance and financial institutions, offering affordable insurance products and access to financial services.

But InsureCow's innovation doesn't stop there. The platform also includes a digital payment system and comprehensive farm management tools, allowing farmers to pay premiums in small, manageable installments. This flexibility is crucial in an economy where cash flow can be unpredictable and seasonal.

This breakthrough in livestock identification has far-reaching implications. Insurance companies can now offer policies with confidence, knowing they can accurately verify claims. For farmers, this means access to affordable insurance products that provide a safety net against the loss of their valuable animals.

InsureCow’s services are designed to improve farm productivity, enhance financial inclusion, and ultimately increase the resilience and profitability of smallholder farmers. Additionally, the platform offers health and life insurance for both animals and farmers, ensuring holistic coverage and financial security.

InsureCow winning startup seed money from Huawei ICT Incubator

"We're not just providing insurance," Tasvir emphasizes. "We're creating a digital financial identity for farmers who have been invisible to the formal banking sector, and giving these farmers easy access to crucial information to help manage their herds."

The impact on rural communities has been profound. By enabling secure livestock identification, farmers can use their animals as collateral for loans, improving their financial stability and reducing reliance on high-interest informal loans. Moreover, the inclusion of health and life insurance provides a safety net for farmers, protecting them from unexpected events and ensuring their well-being. 

The platform's comprehensive farm management tools and data-driven insights also help farmers optimize their operations, leading to increased savings and reinvestment in farms which further drives productivity and profitability. This helps improve food security in the region and reduces poverty, aligning with Bangladesh’s development goals.

The journey to this point, however, was not without challenges. InsureCow's groundbreaking idea initially struggled to find its footing in the market. It was the Huawei ICT Incubator program that provided the crucial support needed to transform the concept into reality.

Huawei's incubator was a game-changer for us," Tasvir recalls. "They provided guidance on fundraising, helped us refine our pitch, and supported us in developing our idea from concept to fruition."

Insurance enables farmers to move on from a single head of cattle to a larger scale

The hard work paid off when InsureCow emerged as the champion in the idea stage category of the Huawei ICT Incubator program in 2022. This victory provided not just recognition but also seed money, Huawei cloud credits and important business connections needed to scale the platform.

Today, InsureCow is expanding its reach across Bangladesh, with plans to venture into other emerging markets facing similar challenges. Future plans include integrating blockchain technology for enhanced transparency and IoT devices for real-time health monitoring of livestock, further strengthening the platform's capabilities. 

The company's success story is more than just a testament to technological innovation; it's a lifeline for millions of smallholder farmers, creating a more secure future for those who feed the nation.