According to the World Bank, extremely few adults living in rural areas use insurance products. Out of 18% of adults that were familiar with insurance products, only 5% purchased a product. This is primarily caused by a lack of understanding of insurance products. According to Finscope, affordability and limited knowledge on the value of insurance, are the other two main deterrents to its adoption in Zambia. One of the top priorities of Zambia's National Financial Inclusion Strategy is to increase the adoption of insurance products and the growth of microinsurance through innovation and the scaling up of suitable insurance solutions tailored to the needs of low-income households, including those in rural areas.
Syngenta Foundation conceptualized The Macro Resilience Program in Zambia to de-risk target smallholder farming communities by promoting the uptake of quality and insured agro-inputs through offering a hybrid index insurance solution that provides a good range of risks coverage i.e., drought, excessive rainfall and uncontrollable pests and diseases. Through these efforts, farmers would not only have access to high-quality inputs but would also be protected against pest invasion and irregular weather events.
The project was piloted in 2021 by Syngenta and ACRE Africa in partnership with other implementing collaborators in Zambia such as MayFair Insurance Company, Musika Development Initiatives , and Zep Re with Syngenta Foundation as the main project coordinator. The pilot season targeted the maize value chain with insured agro input. It focused on distributing an input bundle comprising seed, agro chemical and insurance through a network of agrodealers, whereby farmers’ cover was activated at the time of purchase. During the pilot launched in Central, Eastern and Southern Provinces, the project insured about 1,000 farmers. The payout mechanism comprised of redeemable vouchers to access seed & agro input for the upcoming season.
From the demonstration of proof of concept, through the support of SCBF, the Multi stakeholder programme is now scaling up to provide insured input (maize & soybean value chains) to more rural farmers in all 10 provinces of Zambia for the 2022- 2023 and 2023-2024 seasons, targeting a total of 30,000 smallholder farmers by 2024 (40% women). So far, the scale up has reached 7,833 farmers and plans are underway to incorporate a financial education window, together with Zambia local partners, to address barriers in accessing financial services i.e. access to crop insurance, trainings on savings and budgeting and incorporating Climate Smart resilient trainings, with an aim to protect smallholder farmers’ investment and productivity.
