Tanzania Agricultural Development Bank is using digital technology and climate risk intelligence to identify investment opportunities in climate-resilient agriculture and improve financing for smallholder farmers. The approach aims to help the bank assess climate-related risks among its clients and identify appropriate investments that can strengthen farmers' resilience while ensuring sustainable returns, the bank's Managing Director Frank Nyabundege said during a COP31 side event at the Tanzania Pavilion organised by the government through the Ministry of Agriculture in collaboration with CARE International.
TADB has developed and deployed a digital platform that provides climate risk profiles for its clients. The information generated through the platform enables the bank to identify suitable climate-resilient agricultural investments, improve risk assessment and develop more strategic and inclusive lending approaches. According to Nyabundege, climate change is among the major factors contributing to the perception that agriculture is a high-risk sector because of its dependence on natural resources and vulnerability to changing weather conditions. However, TADB views these challenges as investment opportunities, particularly in building the resilience of smallholder farmers, farming systems and the wider agricultural sector.
The bank has adopted an Integrated Value Chain Financing Model, which supports activities from production and aggregation to value addition and export markets. This approach recognises that agricultural financing requires a different approach from conventional lending because of seasonal production patterns and the interconnected nature of agricultural value chains. TADB is also implementing a strategic roadmap focused on financing green and climate-smart agriculture, mobilising private capital and expanding the use of digital tools to guide climate-related investments.
Nyabundege said strengthening partnerships with development partners and other stakeholders would be critical in unlocking climate finance and accelerating investment in climate-resilient agriculture. Within the next 12 months, the bank plans to intensify efforts to mobilise climate funds, scale up its digital climate risk assessment platform and deepen partnerships to expand financing opportunities for smallholder farmers. Combining technology, innovative financing instruments and strategic partnerships will help transform climate-related challenges into opportunities for sustainable agricultural development, he emphasised.
For smallholder farmers and agricultural businesses in Tanzania, this means improved access to finance based on better understanding of their climate risks and capacity to adapt to weather changes.