Key takeaways

• The new Tool for Agricultural Risk Assessment (TARA) helps expand access to credit and insurance in Kenya. The AI-based platform aids financial institutions in better assessing risk and serving smallholder farmers.
• A recent workshop focused on efforts to scale TARA. Partners aim to reach 50,000 farmers by 2028. The initiative sets strong inclusion targets for women, youth, and marginalized groups.
• Scaling will require coordinated action. Stakeholders prioritized credit guarantees, farmer awareness, financial literacy, and stronger partnerships.

Smallholder farmers and small- and medium-sized agricultural enterprises (SMEs) account for around 80% of Africa’s food production, yet they face an estimated $75 billion annual gap in financing the seeds, fertilizer, tools, and services needed to make them consistently productive and resilient. While agriculture employs over 60% of Africa’s workforce and contributes between 20% and 40% of GDP, commercial banks still channel less than 6% of their lending to the sector.

A major challenge for banks’ lending to farmers is weather risk: in Kenya, climate variability reduces commercial banks’ financial stability due to non-performance of agricultural loans. Insurance companies also struggle to assess an individual farmer’s risk or efforts to prevent damage. This has made insurance companies reluctant to offer comprehensive coverage to smallholder farmers. As a result, only 2% of African farmers have access to agricultural insurance, compared with 20% in the rest of the world.

To address these issues, IFPRI and ACRE Africa developed a picture-based insurance solution that uses smartphone photos to assess crop damage when the insurance index fails to trigger a payout. When offered such insurance, uptake increased by nearly 20 percentage points, with the largest effects among women farmers and farmers in semi-arid areas.

Now, ACRE Africa has developed the Tool for Agricultural Risk Assessment (TARA) aimed at addressing the agricultural finance gap. TARA is an AI-based, location-, season-, and crop-specific risk scoring and monitoring application that draws on climate and economic data, as well as satellite and smartphone images, to make lending decisions and insurance recommendations and provide agricultural advice.

On June 11-12, IFPRI and the Alliance of Bioversity International and CIAT, with support from the CGIAR Science Program on Scaling for Impact, convened a two-day stakeholder consultation workshop in Nairobi, Kenya, to co-develop a scaling strategy for TARA.

The workshop brought together representatives from financial institutions collaborating with the lead implementing partners, as well as (re-)insurers, aggregators, input providers, regulators, government, and (champion) farmers to identify barriers, opportunities, and priority actions for expanding TARA’s adoption.

By enabling financial institutions to better assess agricultural credit risk and bundle (picture-based) insurance, credit, and potentially credit guarantees for farmers who lack traditional collateral, the TARA platform has the potential to expand access to affordable credit and high-quality insurance products tailored to the needs of smallholder farmers.

Developing an action plan

“At ACRE Africa, we believe TARA is a key enabler of digital financial services, helping financial institutions integrate climate risk insights into credit assessment. By complementing traditional credit scoring, TARA supports increased access to credit and insurance for smallholder farmers, strengthening their resilience and financial inclusion.” — Vincent Kioko, Digital Solutions Manager, ACRE Africa.

Workshop participants agreed to reach 50,000 smallholder farmers using TARA-enabled loans bundled with high-quality insurance in Kenya by 2028, with participation goals targeting groups often excluded from smallholder finance: 50% women, 25% youth, and 5% marginalized people, including individuals with disabilities. A World Bank study across five African countries found women received only 10% of credit allocated to smallholders and just 1% of total agricultural credit. Moreover, insurance often fails to reach, benefit, and empower women equitably.

From diagnosis to action

Over two days, the group developed a practical agenda to reach those goals. Participants agreed to set up a technical working group to resolve coordination failures across supply (lenders), demand (farmer awareness), and monitoring. They committed to embedding a gender and social inclusion lens throughout the process rather than treating it as an afterthought, exploring mechanisms such as scoring credit across multiple value chains so women can apply alongside household members and gender-responsive product design features to empower women in household financial decision-making.

Participants called for support for the National Treasury and the Central Bank of Kenya to refine the agricultural pillar of the national financial inclusion strategy. This could include guidelines to consolidate collateral registries so farmers can use their harvested and growing crops to obtain loans and authorizing microfinance institutions and savings and credit cooperative organizations as insurance distribution agents. 

One key proposal was a credit guarantee component, bundled with insurance, allowing for lower fees on credit guarantees issued through TARA. Participants also discussed the need to bring more behavioral research and human-centered design into product innovation, including agent incentives for increased distribution channel efficiency.

Distribution was reimagined too, through a localized aggregation model that links financial institutions and the farmers to whom they lend to cooperatives, community-based organizations (CBOs), and contract buyers, lowering input and insurance costs through pooling, and improving farmers’ profitability by improving market access. Awareness repeatedly emerged as a critical enabler; participants prioritized financial and insurance literacy programs in local languages, demonstration sessions to build trust in satellite and picture-based monitoring, and recurring stakeholder feedback loops to keep the solution grounded in farmers’ realities.

Why it matters

“We want to make sure this innovation genuinely benefits people, that it’s not just another project, but something sustainable. Looking ahead, if we reach our target of 50,000 farmers by 2028, that shouldn’t be the endpoint. Scaling these types of innovations should keep going, expanding their reach, continuing to innovate on the solution, and strengthening the pathways for impact even further.” — Berber Kramer, Senior Research Fellow and Solution Track Lead, IFPRI.

The group’s experience speaks directly to Africa’s wider agricultural financing challenge. Closing this gap is, in the African Development Bank’s words, “a solvable problem with an enormous potential reward.” Making farmers bankable through smart data, bundled risk protection, and genuine partnership, tools like TARA and picture-based insurance offer a path toward a virtuous cycle of agricultural growth, one that reduces poverty, strengthens food security, and lets financial services work for both providers and farmers.

The workshop was engineered to produce something durable: a confirmed scaling ambition, an honest map of the barriers standing in the way, and a prioritized set of solutions each carrying a named owner, a root cause, and a pledge to reconvene after 90 days to track progress.

Berber Kramer is a Senior Research Fellow with IFPRI’s Markets, Trade, and Institutions Unit and Solution Track Lead; Esther Nzuki is a Communication Analyst with the Alliance of Bioversity International and CIAT; Julie Ghostlaw is an IFPRI Country Program Manager; Shalika Vyas is a Scientist I with the Alliance of Bioversity International and CIAT. Opinions are the authors’.

This research is being implemented under the CGIAR Science Program on Scaling for Impact by researchers from IFPRI and the Alliance of Bioversity International and CIAT, in close partnership with ACRE Africa (Kenya) and Dvara E-Registry (India). We deeply appreciate key insights from stakeholders representing the Kenya National Treasury, Yale University, Juhudi Kilimo, Busara, Vision Fund International, Farm Africa, Siraji SACCO, Britam, Greenwells, Financial Sector Deepening Kenya, Norwegian Refugee Council, University of Bonn, and APA Insurance.

We would like to thank all funders who supported this research through their contributions to the CGIAR Trust Fund.