The African Development Bank Group has signed a $997,000 grant agreement with Agriculture and Climate Risk Enterprise (ACRE Africa) to expand access to climate-smart insurance for smallholder farmers in Tanzania, in a project targeting 300,000 farmers across 15 regions.
The grant, announced on 4 November, is being provided through the Africa Digital Financial Inclusion Facility, which is hosted and managed by the bank. It will support digital systems for farmer registration, premium collection, monitoring and insurance claims, alongside distribution partnerships intended to reach communities with limited access to conventional financial services.
According to the AfDB’s official announcement, ACRE Africa will contribute an additional $437,000 in kind, bringing the project’s combined financing to approximately $1.43 million.
Insurance for a climate-exposed sector
Smallholder farmers face risks that can be difficult to manage through savings alone. Drought, flooding and other weather disruptions can damage crops, reduce household income and weaken a farmer’s ability to repay loans or invest in the next planting season.
Insurance can provide a measure of financial protection when covered events occur, but reaching dispersed rural customers is costly. Farmers may also have limited information about products, uncertainty about claims or insufficient cash to pay premiums.
The new project, titled Bridging the Agricultural Risk Protection Gap to Scale Climate Smart Insurance, is designed to address some of these obstacles by combining insurance with digital services and local distribution channels.
ACRE Africa, headquartered in Kenya, works with agricultural stakeholders on risk mitigation, including insurance, access to inputs and credit, advisory services and market connections. Its role in the Tanzanian initiative will involve extending those services to additional farmers.
Digital tools and local partnerships
The project will invest in systems to register farmers, collect premiums and process claims. These functions can reduce administrative burdens and make it easier for providers to serve customers outside major urban centres.
Digital infrastructure alone is unlikely to guarantee adoption, however. The AfDB says distribution will also involve community-based agents and partnerships with financial institutions, agricultural input suppliers and buyers of farm produce.
These intermediaries may help farmers understand available products and connect insurance to other services. The effectiveness of the approach will depend on whether coverage is affordable, policy conditions are clear and claims are processed reliably.
Insurance products also require accurate information about agricultural conditions and insured risks. Data analytics can assist providers in assessing exposure and designing suitable cover, but transparent communication remains essential so customers understand what is and is not protected.
Focus on women and young farmers
The initiative places particular emphasis on women and young people, groups the bank identifies as important participants in agriculture who can face barriers to formal financial services.
Alex Mubiru, Director General of the AfDB’s East Africa Regional Office, linked the partnership to wider financial inclusion goals. ACRE Africa chief executive Ewan Wheeler similarly emphasised the use of insurance and data analytics to help agricultural businesses make informed decisions.
The signing ceremony took place on 28 October at the bank’s East Africa Regional Office in Nairobi. The project aligns with Tanzania’s National Financial Inclusion Framework for 2023–2028 and its longer-term development priorities.
A separate initiative from agricultural lending
The grant is distinct from the AfDB’s recently announced $60 million financing programme to strengthen the Tanzania Agricultural Development Bank. While that programme is designed to expand agricultural lending, the ACRE Africa project focuses on risk protection and digital insurance delivery.
The two approaches address different barriers. Credit helps farmers and agribusinesses finance productive activities; insurance can help manage losses that might otherwise undermine those investments. Neither replaces the need for infrastructure, reliable markets or effective agricultural support services.
How progress can be assessed
The stated target of 300,000 farmers is an objective, not evidence that those farmers have already received insurance. Future reporting should assess actual enrolment, geographic reach, claims experience and whether farmers renew coverage.
It will also be important to distinguish the number of people registered on a digital platform from the number holding active insurance policies. Access is meaningful when customers understand the product, can afford it and receive the protection promised.
If implementation succeeds, the programme could offer lessons for extending agricultural risk management to other African markets facing similar climate and financial inclusion challenges.
Source: African Development Bank Group, 4 November 2026.
Discover more from Towncrier Africa
Subscribe to get the latest posts sent to your email.
