This MRR Discussion Paper summarizes the current state of evidence on microinsurance, contingent credit, stress-tolerant seeds and other risk-management instruments that create new ways for small-scale agricultural households to manage weather-related risks.
In Ghana, insured loans increased farmers' likelihood of receiving credit by between 15 and 21 percentage points. There was no impact on the likelihood that farmers apply for credit but there was an increase in the likelihood of loan approvals of between 17 and 25 percentage points.
This paper summarizes the current state of evidence on index insurance for disaster risk and development including its impacts in the field, remaining challenges and opportunities, research gaps, and the knowledge frontier today.
This study shows that formal insurance uptake has no significant effect on pastoralists' willingness to share risk through customary institutions. Overall, the results imply that index insurance did not crowd out informal risk-sharing mediated by social networks.
This study from Ghana found that index insurance lowers overall demand for agricultural loans while farmers appear to prefer micro-level insurance over meso‐level insurance. The study also shows that farmers are willing to pay to avoid basis risk.
The gains from insurance arise from the transfer of income across states. This paper shows that the transfer of gains from insurance across time can help explain low insurance demand, especially among the poor, with results from a randomized control trial on a crop insurance product in Kenya which removes it.
This paper asks whether a hybrid contract, which combines joint liability with an individual collateral requirement, could resolve tradeoﬀs between collateralized individual loans that exclude those who lack the requisite collateral assets or are unwilling to put them at risk and joint liability loans that are subject to moral hazard and freeriding.