Zimbabwe’s insurance and pensions watchdog is probing Econet Wireless for selling a farming insurance product without a valid licence.

The Zimbabwean Insurance and Pension Commission (IPEC) has disclosed that it is investigating Econet’s EcoFarmer weather indexed insurance scheme for farmers, which was only introduced to the market last week.

However, Econet, which is Zimbabwe’s largest mobile operator with over 8 million subscribers, says that its EcoFarmer service is backed by a licenced underwriter.

EcoFarmer enables farmers to receive information about weather patterns and other information such as market data and details about inputs through their mobile phones.

Using EcoFarmer, Econet says “a farmer can buy insurance for as little as eight cents per day, which is deducted from their prepaid phone account during the agricultural season.”

“If the rain does not fall, resulting in a drought, the farmer will be given as much as $100 for every 10kg seed pack planted,” Econet has said.

Analysts and experts have described the scheme as being innovative and crucial in boosting Zimbabwe’s ailing agricultural sector.

But the IPEC is closely monitoring the offering.

“With respect to their weather index micro-insurance product (EcoFarmer) advertisements in the print media, it is not clear from the same advert whether Econet Wireless is the underwriter of the product or a duly registered insurance company using their mobile platform to offer the product,” said IPEC’s Manette Mpofu.

“Meanwhile, investigations into the matter by the commission are underway,” added Mpofu.

And in a twist of events, while Econet has said that EcoFarmer is being run in partnership with a licenced underwriter, the insurance regulator has said Zimnat Lion Insurance had “professed ignorance” on being the underwriter for Econet’s service.

Moreover, Econet Wireless officials had conceded that although the company had started registering farmers under the scheme, EcoFarmer is yet to get regulatory approvals.

“EcoFarmer is currently in its initial phase of registering farmers for the service while awaiting the finalisation of relevant regulatory requirements related to the appointment of the underwriter to partner in the venture,” said Darlington Mandivenga, chief executive officer of Econet Services.