One Acre Fund, MunichRe and sfr consulting expand innovative risk transfer mechanism to Zambia

One Acre Fund clients in Zambia picking up their orders of seed and fertilizer. Photo by Max Pin / One Acre Fund

One Acre Fund, Munich Re and sfr-consulting enter into the scaling phase of an innovative risk transfer solution launched last year in Kenya. With the objective to curb hunger in Sub-Saharan Africa, sfr-consulting designed together with Munich Re a portfolio credit protection to enhance investments in agro production.

One Acre Fund offers a bundle of farm inputs, financing, training, and market facilitation to smallholder farmers. Due to the comprehensive package, enrolled smallholders could experience a 50 percent increase, on average, in their crop yields in their first year. To enhance and mobilize this dormant local capacity, sfr-consulting designed together with Munich Re, a comprehensive insurance scheme to protect local finance aggregators against default and non-performance of the distributed loans. The initiative started in Kenya in 2017 and, based on the lessons learned, the pilot was expanded to Zambia in 2018.

One Acre Fund has operations in Kenya, Rwanda, Burundi, Tanzania, Malawi, and Uganda, and an earlier stage pilot in Zambia. One Acre Fund has a bold goal of reaching at least 1 million farm families, including almost 4 million children, by the end of the decade.

Statement from Jenya Shandina, Senior Manager at One Acre Fund:
We are very pleased to take this truly unique and very important risk management product into the scaling phase. The insurance product allows One Acre Fund to continue expanding into existing and new markets, and to deliver an impactful package of goods and services to a growing number of families.

Statement of Franz Karmann, Managing Director sfr consulting:
The unique risk transfer solution is an excellent example of pushing back the boundaries of insurability via innovation. Given the importance of agro investments in the developing and emerging countries we are proud that with the geographical expansion we could prove the long-term benefit of this unique comprehensive portfolio insurance in contrary to usually available partial risk protections.

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Sustainable Finance Risk Consulting GmbH
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info@sfr-consulting.com