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Parametric insurance and technology adoption in developing countries

Author

Listed:
  • Enrico Biffis

    (Imperial College London)

  • Erik Chavez

    (Imperial College London)

  • Alexis Louaas

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Picard

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

Technology adoption is crucial for the development of low income countries. This paper investigates how parametric insurance can contribute to improving access to finance, and hence to technology, for smallholder farmers. In a model with moral hazard, we show that bundling para-metric insurance with loans may lower collateral requirements, thus promoting the financial inclusion of poor households. The case of agricultural input loans and weather-index insurance is studied in detail and related to bundled finance solutions recently piloted among smallholder farmers in Tanzania.

Suggested Citation

  • Enrico Biffis & Erik Chavez & Alexis Louaas & Pierre Picard, 2020. "Parametric insurance and technology adoption in developing countries," Working Papers hal-02875530, HAL.
    • Handle: RePEc:hal:wpaper:hal-02875530
    Note: View the original document on HAL open archive server: https://hal.science/hal-02875530
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    References listed on IDEAS

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    Cited by:

    1. Zhanqiang Zhou & Yuehua Zhang & Zhongbao Yan, 2022. "Will Digital Financial Inclusion Increase Chinese Farmers’ Willingness to Adopt Agricultural Technology?," Agriculture, MDPI, vol. 12(10), pages 1-21, September.
    2. Linwei Wang & Yixin Hu & Rong Kong, 2023. "The Impact of Bancassurance Interaction on the Adoption Behavior of Green Production Technology in Family Farms: Evidence from China," Land, MDPI, vol. 12(5), pages 1-26, April.

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    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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