| Almost universally, implementers of index insurance for low income households have chosen to embed insurance with other interventions designed to improve productivity, with the insurance used almost entirely to make the other interventions possible. A common example is to use the insurance to allow farmers to have access to loans by reducing the probability of weather related defaults. A bundled loan/insurance implementation with overwhelming take-up rates had low insurance take-up rates when researchers unbundled the package, covering the loan default risk, so that the loans could be available without requiring insurance. If low income farmers are highly risk averse, why do they place so little value on risk reducing insurance once their access... |
