Ms. Adetola Adegbayi
Leave a comment and share
Chuks Udo Okonta
Leadway Assurance Limited has implored investors into agrictect to seek professional counsel before parting with their money.
According the company, though the business of insurance companies is to absorb risks, it only covers pure risks in agrictech crowdfunding and not the speculative risks therein.
Stating this at the virtual Leadway Media Roundtable in Lagos recently, the Executive Director, Leadway Assurance Company Limited, Ms. Adetola Adegbayi, said, the concern of insurance companies in Agric investment crowdfunding was to insure the farm assets and not the entire money crowd funded.
Stressing that agricultural sector has now been flooded with lots of agric tech companies who crowdfund from the public with a promise to invest the proceeds in agricultural projects, which could be livestock or plantation, she said, such crowdfunding firms do promise investors higher returns on their contributions.
Because of the promise of higher returns on investment, she said, the public, most times do not consult well, neither do they examine the credibility of the managers of these firms nor ask the right questions before investing their hard earned money into these ventures, adding that, ‘but when they are faced with a loss, they begin to look unto insurance companies to compensate them.’
To her, insurance companies don’t insure the total money crowd funded, but only insure the portion invested in agric projects, and that if there is a loss, the underwriter will only compensate the insuring agric tech company and not the investors or the farmers.
“The total money crowd funded is a speculative risks, insurance companies don’t insure that and so, no insurance firm would be held responsible for a loss that occurred on the entire fund. Underwriters only insure risks emanating from the Agric projects in whose part or whole money is invested in, and this is a pure risk,” she pointed out.
Explaining how the crowdfunding works in the agriculture sector, the head, agric and microinsurance department, Leadway Assurance, Mr. Ayoola Fatona, listed the stakeholders involved which are: the agrictech company, the investing public, the farmers, and insurance companies.
Stating that agrictech company crowd-funds from the public and disburse such money to the farmers as a cheap loans, he said, the investing public expects returns on the money they invested, while insurance company covers insurable risks in this process.
Speaking further, he said: “Agric cover is entirely for the farm assets and not on the entire operation of the crowdfunding. For instance, if an agrictech company crowdfunding N1 million and invest N600,000, from it, in a farm, Leadway will only pay the N600,000 claims and not the entire N1 million.
We monitor the farms before insuring them, so, we do our due diligence very well to avoid could play.”
The associate director/ head, corporate communications & services, Leadway Assurance, Ms. Olubunmi Adeleye, charged the investing public to seek investment experts advice before entering into a crowdfunding transaction, urging them, to also do due diligence on the agrictech company raising the funds.
