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UKAID Department for International Development (R4D) (2014)

Optimal Packaging of Insurance and Credit for Smallholder Farmers in Africa

Insurance Credits Smallholders

UKAID Department for International Development (R4D)

Titre : Optimal Packaging of Insurance and Credit for Smallholder Farmers in Africa

Région : Global

Projet de recherche pour le Développement : ES/L012235/1

DFID Programme : DFID-ESRC Growth Research Programme

Organismes de mise en œuvre University of Greenwich

Durée : 01-10-2014 / 30-09-2017

The aim of this project is to provide smallholder farmers in low-income countries with access to an appropriate package of insurance and credit which will yield improved agricultural productivity. Farm households in Africa must cope with bad conditions as to soil quality, weather and infrastructure. The variability of rainfall causes yields to vary strongly from one year to the next. With yields already low (due to poor soil condition) these variations can be life threatening. Meanwhile, inadequate infrastructure makes it difficult to help the households with access to financial services, insurance and inputs that could stabilize their access to resources, and enhance yields. Solving a single aspect, say bringing inputs to the farm, will not be sufficient as credit is also needed. But credit can only be provided if sufficient likelihood exists that loans will be repaid. Here, insurance can help. If insurance of the loan makes it attractive enough for the lender, a package can be composed of inputs, with credit and insurance, that solves all these problems with one bundle. Yet, the households will remain exposed to some risks as insuring against all is prohibitively expensive. What is the appropriate degree of insurance in such bundles ? That is the core question addressed in this research. It aims at supplying inputs to farmers on credit, with insurance, in such a way that a good balance is found between the benefits and risks to the farmers and the profits and risks to the credit provider.

Total Cost : £694,897.

Présentation : UKAID

Page publiée le 4 septembre 2016, mise à jour le 29 novembre 2017