Scaling-up and improving National Agriculture Insurance Scheme in Rwanda

The Rwandan agricultural sector contributes about one third to GDP and is a critical driver of economic growth. More than 70 percent of all households are engaged in agriculture. Both crop and livestock production in Rwanda are vulnerable to natural disasters such as droughts, landslides, floods and storms, and are subject to pest and disease-related risks. The vast majority of agricultural producers in Rwanda are smallholder farmers who are highly vulnerable to climate change and natural disasters, a fact that poses a significant social and economic problem.

To crowd in investment to the agriculture sector and as part of a broader engagement on de-risking the sector as a whole, the Government of Rwanda launched the National Agricultural Insurance Scheme (NAIS) in 2019. NAIS aims at supporting sustainable agricultural production by stabilizing the income of farmers, increasing productivity and facilitating access to loans. The insurance programme consists of two product types, an indemnity-based livestock and an Area-yield index insurance for crops that currently covers mostly maize and rice farmers. During the conceptualization and design stage, extensive consultations were undertaken with key government and non-government stakeholders, farmer-based organizations, development partners, insurance companies and smallholder farmers. All these stakeholder views on the relevance and potential challenges of implementing agriculture insurance schemes were factored into the design of NAIS.

This new project, supported by the InsuResilience Solutions Fund (ISF), managed by Frankfurt School of Finance & Management (FS) and funded by KfW Development Bank, aims to further enhance and scale-up the offer of NAIS by distributing the products through additional cooperatives, banks and microfinance institutions. To this end, a grant agreement supporting the improvement and extension of the existing insurance products for Rwanda’s smallholder farmers was signed. The project is being implemented by a partnership encompassing the Ministry of Finance and Economic Planning (MINECOFIN) as project lead and K. M Dastur & Company Limited (KMD), a global insurance and reinsurance broker providing technical assistance, supported by the Ministry of Agriculture and Animal Resources (MINAGRI). The African Reinsurance Corporation (Africa Re) is one of the risk takers of the scheme.

The aim of the ISF project is to include additional crops and livestock (e.g. poultry, piggery) and to bundle insurance with agricultural credit and inputs. This effort is supplemented by training field agents on the product, educating farmers and enhancing local technical capacity of different stakeholders. Furthermore, automation of claims processes and mobile applications to capture data, as well as the use of mobile money will be used to facilitate upscaling and to enhance transparency. The government subsidises up to 40% of the cost of the premiums.