GCF makes its first investment in an Indian microinsurance firm to expand climate-linked coverage for small and marginal farmers

The Green Climate Fund (GCF), the world’s largest climate finance body, has approved a capital infusion of USD 20 million in Kshema General Insurance to expand access to insurance for India’s small and marginal farmers. The investment aims to strengthen financial protection in the rural sector against rising climate-related risks.

The funds will help Kshema extend its rural coverage, boost underwriting capacity, and increase access to climate-linked insurance products across farming regions. The company will also enhance its technology platform, the Kshema Cognitive Engine, which uses data analytics to provide customised crop insurance, weather alerts, and crop health information.

The initiative focuses on India’s 86 per cent small and marginal farmers, a group highly exposed to extreme weather events such as droughts and floods. Kshema’s approach links insurance with early warnings and adaptation tools to help farmers manage climate risks and adopt sustainable agricultural practices.

The investment was cleared following coordination with the Ministry of Environment, Forest and Climate Change and the National Bank for Agriculture and Rural Development. The project, titled Harnessing Insurance for Climate Resilience in Indian Agriculture, has been identified by GCF as a model for integrating financial inclusion into climate adaptation.

The move supports the government’s goal to expand insurance access under the Insurance Regulatory and Development Authority of India’s Insurance for All by 2047 mission, particularly in smaller towns. The partnership between GCF and Kshema is expected to contribute to India’s broader climate adaptation and rural resilience efforts under the Paris Agreement.