Microinsurance feasibility study for smallholder farmers, Tanzania

• Jul 26, 2025
• 2 min

Smallholder farmers in Tanzania face increasing threats from climate variability and agricultural risks, yet remain largely excluded from formal risk-transfer mechanisms. With limited access to insurance, many rely on informal coping strategies that offer little protection in times of crisis. Although interest in agricultural microinsurance is growing, uptake remains low due to poor awareness, affordability challenges, and weak delivery infrastructure. These persistent barriers continue to undermine the financial resilience of rural farming communities and highlight the urgent need to explore scalable, inclusive insurance models tailored to their needs.

MSC explored the potential of microinsurance to support Tanzania’s smallholder farmers, particularly as a tool to manage climate and agricultural risks. We conducted a detailed feasibility assessment, which started with a review of existing insurance products and the policy landscape, followed by primary research with farmers, insurers, and agricultural stakeholders. The study evaluated insurance needs, affordability levels, awareness, and delivery barriers. MSC proposed customer-aligned product concepts that accounted for behavioral factors and local risk patterns. 

The research also identified opportunities for viable, scalable microinsurance models. It laid the groundwork to pilot climate-smart insurance products and build a stronger business case for insurers to serve rural markets. This would enable AGRA to align its programs with practical, evidence-based risk mitigation solutions. A workshop was held in Dar es Salaam with relevant stakeholders for comments and validation of the findings. A final report and recommendations were delivered to guide the development and deployment of an appropriate and affordable micro-insurance product.

AGRA funded the project.