(A partnership between UKaid Sakchyam and Shikhar Insurance Ltd)


UKaid Sakchyam Access to Finance Programme (Sakchyam) is committed to connecting the rural poor, Disadvantaged Groups (DAGs) and women to formal financial products and services to protect themselves from ranges of risks they face in their daily lives.  While enhancing access to finance for people living in remote and inaccessible regions, offering insurance product in addition to saving, loan and remittance is equally important to protect them and give the feeling that they are secured. As majority of insurance businesses are focused in urban and high income market segment, there is a large scope for financial institutions in developing appropriate financial products to protect low income households from different risk they face.


Weather related risks has increased the vulnerability of smallholder farmers and has negatively impacted their livelihoods. Apple farmers are facing weather related risks such as drought and hailstorm which hampers their apple production. Farmers have bad experiences of production volume and quality of apple due to hailstorm. Limited rainfall in April and May also contributes to less production of apples as rainfall is required during its flowering season. Due to climate change, the adverse weather has severely impacted farmer’s productivity. In addition, due to hailstorm, the production volume and quality of apple is degraded.

Sakchyam’s Interventions

In this scenario, Weather Index Insurance (WII) can present significant economic efficiency by allowing farmers to put more resources on agriculture. It also helps open doors to avail ranges of other financial services. In an effort to contribute to WII sector, Sakchyam collaborated with Shikhar Insurance Company Ltd. (Shikhar) to introduce WII of apple farmers of five apple farming districts in mid-western region for the first time in Nepal.

Sakchyam assisted Shikhar in developing appropriate WII product to minimize the effect of adverse weather in apple farming. Sakchyam and Shikhar conducted feasibility study to understand the need of insurance products for farmers. After analyzing historical weather data and production data of apple, appropriate WII product was developed. Hailstorm was also added as an additional rider, as it is not measured via weather index, to address farmer’s risk of hailstorm.

Sakchyam supported Shikhar Insurance to introduce WII product in Jumla, Kalikot, Mugu, Dolpa and Mustang. Shikhar started implementing WII in Jumla from 2016 and expanded to Kalikot, Mugu, Dolpa and Mustang districts. With Sakhyam’s support, Shikhar has also expanded WII product in paddy and sugarcane in Kailali and Kanchanpur. In addition, Sakchyam also supported Shikhar to open branches in Doti and Dailekh to provide agriculture insurance services to farmers in close collaboration with CONNECT, another DFID funded project.


Through its Sakchyam-funded project, Shikhar aims to serve more than 11,000 clients in different intervention districts.  They will also expand crop and livestock insurance to needy farmers. The product will cater to large sections of disadvantaged and marginalized farmers. This initiative is also expected to be replicated by other insurance companies in relevant crop and geography.

As of June 2019,

  • Issued more than 3,411 Weather Index Insurance & Livestock Insurance policies to apple farmers insuring more than 87,800 apple trees worth more than NPR 241 million.
  • Paid claim worth NPR 11.1 million to 1,376 farmers.