Financing Climate Resilience for Malawi’s Smallholder Farmers

December 22, 2023
A smiling Jeya Nsinda, farmer and mother from Thoylo District, Malawi. Photo: IFC A smiling Jeya Nsinda, farmer and mother from Thoylo District, Malawi. Photo: IFC

By Sameera Hassan

For Jeya Nsinda, a farmer and mother of three from Thoylo District in Malawi, everything changed when Cyclone Freddy swept through her community in February and March 2023.

Heavy rains from the longest tropical cyclone ever recorded lashed buildings and fields, washing away crops and soil and ruining months of hard work. Nsinda was lucky to escape with her life.

“We were in the house sleeping. I grabbed my children and ran,” she said. “With Cyclone Freddy, a lot of people suffered. It led to food shortages and lack of money to buy provisions.”  

The cyclone destroyed about 180,000 hectares of crops in Malawi and left many farmers without assets or the possibility of a quick recovery. Fortunately, Nsinda’s farming activities were insured—she was able to purchase seeds and fertilizer with the help of a payout from One Acre Fund, an agricultural service fund that provides smallholder farmers in Africa with much-needed insurance.

In the cyclone’s aftermath, Nsinda was one of about 44,000 farmers who received compensation from the Fund, which also provides farmers with training on climate-resilience farming techniques and assistance selling harvests to regional and international markets.

“The payments I received after the storm were lifesaving,” Nsinda said. 


Climate Insurance

One Acre Fund, with support from IFC, is helping farmers access climate insurance in sub-Saharan Africa, where millions rely on the land for their incomes. Smallholder farmers constitute 70 percent of  Africa’s population—but less than 3 percent of smallholder farmers are insured.

Farming without insurance leaves many financially vulnerable in the face of shifting weather patterns, and farmers can face potentially staggering losses from droughts and floods.

“In Malawi and other parts of Africa, farmers don’t have insurance largely because of the limited availability of affordable, effective products and because of limited exposure to the benefits of insurance,” said Johannes Borchert, Head of Global Insurance at One Acre Fund. “We are working to change this.”

IFC and One Acre Fund are partnering in Malawi and in five other countries – Burundi, Kenya, Nigeria, Rwanda, and Tanzania – to develop and roll out new climate insurance products tailored specifically to the needs of smallholder farmers, especially those in the low-income segment of the insurance market. 

One Acre Fund already offers enrolled farmers insurance coverage against unexpected weather events. In the aftermath of Cyclone Freddy, an increasing number of farmers are joining the program, reassured that they’ll be better protected in the face of natural disasters.

In 2021, One Acre Fund served 3.2 million farmers, both directly with a bundle of farm services and indirectly by improving access to farm services. The Fund aims to serve 10 million farmers by 2030.

“Climate insurance helps support financial security, protection, and inclusion by distributing payouts in the event of a climate emergency,” said Borchert. “It also enhances access to credit by increasing the willingness of banks to offer financial products to insured individuals and small agri businesses.”



The partnership falls under the IFC Africa Inclusive Insurance Program, which provides advisory services to insurance companies, microfinance institutions, fintechs, insuretechs, and regulators across 15 countries, including to develop and distribute customized inclusive insurance products and build the resilience of smallholder farmers against climate risks.

“As climate risks in Africa continue to grow, affordable and inclusive climate insurance solutions are becoming even more crucial. Public and private partnerships are vital for achieving food security and resilience for smallholder farmers,” said Sharon Onyango, Program Lead for IFC Africa’s Inclusive Insurance Program. 

With financial support from the Federal Ministry for Economic Cooperation and Development Germany (BMZ) and the Dutch Ministry of Foreign Affairs, the program aims to connect at least five million smallholder farmers and MSMEs to climate insurance by 2025.