A boy and a woman struggle with the dusty wind looking for water in Wajir, Kenya (photo on Flickr by Jervis Sundays, Kenya Red Cross Society).

Today, for the first time in Africa, an insurance policy that combines an Islamic-compliant financial instrument with innovative use of satellite imagery is compensating Muslim pastoralists for drought-induced losses suffered in Kenya’s northeastern Wajir County, where livestock are valued at Ksh46 billion (USD550 million).

Thirty women and 71 men in arid and semi-arid Wajir are the first beneficiaries of livestock insurance that conforms to the Islamic concept of takaful, in which risks are shared among a group of participants. Through a contract called tabbaru (donation), participants make contributions to a risk fund. In the case of a payout, which happened today, the fund makes payments commensurate with the contributions received.

The pilot program is paying approximately Ksh500,000 (USD5,800) for losses suffered to their herds…