Paper: Does bundling credit with index insurance boost agricultural technology adoption? Evidence from Ghana

Smallholder adoption of advanced agricultural technologies, such as compound fertilizer and hybrid seeds, remains low in Sub-Saharan Africa. Among the obstacles to adoption is limited access to credit; banks may not want to lend to smallholders without collateral nor in the risky sector agriculture. This study conducted a randomized control trial to assess the impact of bundling drought index insurance with agricultural loans on farmers’ technology adoption and, ultimately, yields. It tested both individual and group (“joint liability”) bundled insurance arrangements. Few significant impacts were found. However, a number of limitations in the study design should limit conclusions drawn. The authors note that access to a financial product may be insufficient to create significant farmer behavior change amid other major obstacles to input adoption. 

Read the full paper in Agricultural Economics