Microinsurance Models for the Most Vulnerable, 18th Microcredit Summit, Abu Dhabi UAE, March 14-17, 2016

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Insurance as a Risk Management
Tool in Agricultural Lending
Olga Speckhardt
Head of Global Insurance Solutions - Syngenta Foundation
18th Microcredit Summit
Abu Dhabi – March 15-17 2016

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Distribution of Agricultural Insurance by
MFIs – Aspects to be Considered
1. Products should be simple, easily accessible and affordable.
 Farmer registration for seed insurance through mobile phones.
 Group proposal opportunities for MFIs.
2. Bundled distribution models often are more efficient.
 E.g. bundling insurance with credit.
3. Make it affordable – for farmers and MFIs.
 Simple, bundled distribution models.
 Opportunities to pay by instalments.

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Distribution of Agricultural Insurance by
MFIs – Benefits and Impact
4. Benefits for MFIs?
a) Insurance can be used as a substitute collateral - The MFI can lend more comfortably
to smallholder farmers
b) Some Agencies & Insurance Companies may offer an administrative fee to the MFI for
the activities undertaken and market access
c) Potential to use insurance to differentiate products from others, achieve their social
impact objectives, create and enhance customer loyalty
5. Impact on MFI operations?
a) Acre Africa has developed an automated system to simplify insurance distribution
and management. The MFI only has to input the basic details of the farmer to get a
price quote, risk profile and payment option. This simple process has very little cost
and time effect.

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Risks in Financing Agriculture
The presence of uncontrollable variables (weather,
pests and diseases) increases the risk of losses for
farmers causing:
• Delayed payments
• Restructured loans and
• Default due to loss of produce
Common Risk Mitigation Strategies:
• Lending to farmers who have alternative source of
income
• Creation of partnerships to ensure customer loyalty
and value addition
• Group lending & guarantees
• Collateral
• Insurance – Credit Life, MultiPeril, Asset & Livestock
How many agricultural
related loans contribute to
the non-performing loans
portfolio annually?

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Impact of Risk Management in Agricultural
Lending
How much more lending would
you do if the majority of these
risks were taken care of?
How many farmers would improve
their livelihoods due to increased
access to financial services?
By how much would the Non-
Performing Loans Portfolio be
reduced?
How competitive would your
product be compared to others in
the market with insurance as a
value addition?
Agricultural Insurance:
Unlocking the full
potential of agriculture

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Thank you for your attention
Contact us:
enquiries@acreafrica.com
olga.speckhardt@syngenta.com