Loan Insurance Prevents Major Losses

In early 2015, Ms Mwajuma took out a loan from the One ACRE Fund, a local NGO in Tanzania, and purchased several bags of hybrid maize seed. In partnership with One ACRE Fund, ACRE Africa has designed a credit-linked insurance product that allows farmers to access seed on credit early in the season, and pay the fund at the end of the season after harvesting and selling. Ms Mwajuma planted her seed on her 2.5-acre plot of land. Unfortunately, there was excess rainfall (El Nino) during that season, and instead of harvesting the expected 20 bags of maize, Ms Mwajuma harvested only half a bag. However, since she was insured, her loan was cancelled as the insurance company paid the One ACRE Fund. As a result, Ms Mwajuma did not experience a major financial setback, and was still eligible for a loan in the subsequent planting season.