nep-mfd New Economics Papers
on Microfinance
Issue of 2017‒08‒27
four papers chosen by
Olivier Dagnelie
Université de Caen

  1. Insurance structure, risk sharing, and investment decisions: An empirical investigation of the implications of individual and group weather index insurance By Munro, Laura
  2. Health insurance, a friend in need? Evidence from financial and health diaries in Kenya By Geng, Xin; Ide, Vera; Janssens, Wendy; Kramer, Berber; van der List, Marijn
  3. God insures those who pay?Formal insurance and religious offerings in Ghana By Auriol, Emmanuelle; Lassebie, Julie; Panin, Amma; Raiber, Eva; Seabright, Paul
  4. Innovación social y microcrédito: ¿estamos financiando el statu quo de la pobreza? By Santiago Espinosa Moyano; Nicolás Eduardo Fajardo Acosta; Daniela Gantiva Parada

  1. By: Munro, Laura
    Abstract: Recognition of take-up and transaction cost challenges in individual microinsurance has led to a surge of interest in group microinsurance. Yet few studies have considered the effect of group insurance on the investment decisions of the insured. In the case of weather index insurance, this is an important omission. Analogous to group microcredit, group weather insurance may exacerbate two key challenges depending on the information environment: moral hazard and group pressure. Experimental results from a framed field experiment in Gujarat, India, confirm that group pressure leads to an 8 percent reduction in risk taking in contexts with perfect information and group insurance (relative to individual insurance). The effects of moral hazard are more limited, however. As higher risk taking is associated with higher average agricultural productivity—and thus, development—these findings put a premium on greater attention to group selection, the information environment, and the regulation of payout distribution.
    Keywords: finance, insurance, group insurance, weather index insurance, group pressure, investment decisions, farmer decision making,
    Date: 2017
  2. By: Geng, Xin; Ide, Vera; Janssens, Wendy; Kramer, Berber; van der List, Marijn
    Abstract: Health insurance can protect consumption from health shocks, but it can also crowd out informal transfers. This paper examines whether health insurance improves consumption smoothing in the face of health shocks, and to what extent results depend on households’ access to informal transfers as a risk coping strategy. Using high-frequency panel data on health and finances collected in rural Kenya, we show that mobile money users have stronger access to informal transfers than nonusers. We further find that health shocks induce nonusers of mobile money to lower their nonhealth expenditures by approximately 25 percent in weeks when they are uninsured. These same households are able to smooth consumption in weeks with insurance coverage, due to lower out-of-pocket health expenditures. In contrast, mobile money users are able to smooth consumption when experiencing health shocks even in the absence of health insurance, due to an inflow of informal transfers. For this group, health insurance improves healthcare utilization and does not crowd out the inflow informal transfers during weeks with health shocks. These findings have implications for the design of health insurance and mobile health financing products.
    Keywords: health insurance,
    Date: 2017
  3. By: Auriol, Emmanuelle; Lassebie, Julie; Panin, Amma; Raiber, Eva; Seabright, Paul
    Abstract: This paper presents experimental evidence exploring how insurance might be a motive for religious donations by members of a Pentecostal church in Ghana. We ran- domize enrollment into a commercially available funeral insurance policy and let church members allocate money between themselves and a set of religious goods in a series of dictator games with significant stakes. Members enrolled in insurance give significantly less money to their own churches. At the same time, enrollment in insurance reduces giving towards other spiritual goods. We set up a model exploring different channels of religious based insurance. The implications of the model and the results of the dictator games suggest that adherents perceive the church as a source of insurance and that this insurance is derived from beliefs in an interventionist God. Survey results suggest that community-based material insurance is also important and we hypothesize that these two insurance channels exist in parallel.
    Keywords: economics of religion; informal insurance; charitable giving
    JEL: D14 G22 O12 O17
    Date: 2017–07
  4. By: Santiago Espinosa Moyano; Nicolás Eduardo Fajardo Acosta; Daniela Gantiva Parada
    Abstract: Resumen Este documento busca identificar el papel de las políticas públicas que fomentan el microcrédito en Colombia mediante el estudio del caso de la Banca de las oportunidades. Para este fin, se relacionan los conceptos innovación social y microcrédito en cuanto a concepción y objetivo a partir de una visión crítica que incluya perspectivas tanto ortodoxas como alternativas que permitan ampliar la capacidad de análisis del problema. Así también, se explica, por medio de una descripción histórica de las políticas que fomentan el microcrédito, si el camino seguido por este en Colombia ha mantenido la propuesta original de ser una herramienta de lucha contra la pobreza. Finalmente, se hace un breve análisis cualitativo de dichas políticas intentando plantear una generalidad en cuanto a la política de microcrédito empleada por el gobierno nacional.
    Keywords: Innovación social, microcrédito, política pública, desarrollo económico
    JEL: I38 L31 O22 Z18
    Date: 2017–08–23

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