Adoption and impact of credit-linked crop index insurance: a case study in Mali

Duchoslav, Jan; Asseldonk, Marcel van

doi:10.22004/ag.econ.276090

Cited by 1 publication

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“…Design options include target premium rates, frequency of small and large pay-outs and different possible levels of spatial aggregation. These features aim to support low prices and to simplify sales and policy administration, whilst maintaining a sufficient pay-out level in dry years as has been rolled-out in for example Mali (Duchoslav and van Asseldonk, 2018).…”

Section: Methodology Index-based Insurance Designmentioning

confidence: 99%

Adoption and preferences for coffee drought index-based insurance in Uganda

Asseldonk¹,

Muwonge²,

Musuya³

et al. 2020

Stud. Agr. Econ.

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Micro-insurance can be an effective approach to smoothening income in adverse times and potentially a way to contribute to the financial inclusion of vulnerable populations. However, direct sales to individual smallholders remains a challenging task without an easily scalable solution. The current research seeks to find the determinants of adoption of a stand-alone coffee index-based insurance product in Uganda marketed by a farmer cooperative, and elicited preferences for improving the design and delivery model. A stratified household survey was conducted among 614 farmers, of which 40% adopted insurance and 62% were member of a farmer cooperative. In odds ratio terms, adopters perceived themselves to be 3.09 times more likely to receive a pay-out than non-adopters (P<0.01), and those having better access to extension services were 2.47 times more likely to adopt a policy (P<0.01). Yet farmers perceiving the design as complex were approximately half as likely to adopt (P<0.05). Farmers preferred the option of premium payments proceeds on delivery, mobile premium payments and delivering insurance through cooperatives/associations. Deepening insurance uptake among coffee farmers will therefore require a strong focus on communication and information sharing facilitated by cooperatives/associations (e.g. farmer cooperates, village and saving associations, or women's associations).

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Section: Methodology Index-based Insurance Designmentioning

confidence: 99%