Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India
Smallholder farmers often lack documented land rights to serve as collateral for formal loans, with livelihoods inextricably linked to weather conditions. Resulting credit and risk constraints prevent them from investing in their farms. We implemented a randomized evaluation of KhetScore, an innovat...
| Main Authors: | , , , |
|---|---|
| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2024
|
| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/162767 |
| _version_ | 1855518905023332352 |
|---|---|
| author | Kramer, Berber Pattnaik, Subhransu Ward, Patrick S. Xu, Yingchen |
| author_browse | Kramer, Berber Pattnaik, Subhransu Ward, Patrick S. Xu, Yingchen |
| author_facet | Kramer, Berber Pattnaik, Subhransu Ward, Patrick S. Xu, Yingchen |
| author_sort | Kramer, Berber |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Smallholder farmers often lack documented land rights to serve as collateral for formal loans, with livelihoods inextricably linked to weather conditions. Resulting credit and risk constraints prevent them from investing in their farms. We implemented a randomized evaluation of KhetScore, an innovative credit scoring approach that uses remote sensing to unlock credit and insurance for smallholders including landless farmers in Odisha, a state in eastern India. In our treatment group, where we offered KhetScore loans and insurance, farmers - and especially women - were more likely to be insured and borrow from formal sources without substituting formal for informal loans. Despite increased borrowing, treated households faced less difficulty in repaying loans, suggesting that insured KhetScore loans transferred risk and eased the burden of repayment. Moreover, the treatment enhanced agricultural profitability by increasing revenues during the monsoon season and reducing costs in the dry season. Positive and significant effects are found among both farmers with unconstrained baseline credit access, and quantity rationed farmers, suggesting that KhetScore helps address supply-side credit constraints. Finally, the treatment significantly enhanced women’s empowerment and mental health. In conclusion, remote sensing-enabled financial products can substantially improve landless farmers’ access to agricultural credit, risk management, resilience, and well-being. |
| format | Artículo preliminar |
| id | CGSpace162767 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2024 |
| publishDateRange | 2024 |
| publishDateSort | 2024 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1627672025-11-06T05:36:49Z Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India Kramer, Berber Pattnaik, Subhransu Ward, Patrick S. Xu, Yingchen smallholders land rights loans livelihoods weather credit remote sensing access to finance gender impact assessment insurance Smallholder farmers often lack documented land rights to serve as collateral for formal loans, with livelihoods inextricably linked to weather conditions. Resulting credit and risk constraints prevent them from investing in their farms. We implemented a randomized evaluation of KhetScore, an innovative credit scoring approach that uses remote sensing to unlock credit and insurance for smallholders including landless farmers in Odisha, a state in eastern India. In our treatment group, where we offered KhetScore loans and insurance, farmers - and especially women - were more likely to be insured and borrow from formal sources without substituting formal for informal loans. Despite increased borrowing, treated households faced less difficulty in repaying loans, suggesting that insured KhetScore loans transferred risk and eased the burden of repayment. Moreover, the treatment enhanced agricultural profitability by increasing revenues during the monsoon season and reducing costs in the dry season. Positive and significant effects are found among both farmers with unconstrained baseline credit access, and quantity rationed farmers, suggesting that KhetScore helps address supply-side credit constraints. Finally, the treatment significantly enhanced women’s empowerment and mental health. In conclusion, remote sensing-enabled financial products can substantially improve landless farmers’ access to agricultural credit, risk management, resilience, and well-being. 2024-10-31 2024-11-26T18:41:52Z 2024-11-26T18:41:52Z Working Paper https://hdl.handle.net/10568/162767 en Open Access application/pdf International Food Policy Research Institute Kramer, Berber; Pattnaik, Subhransu; Ward, Patrick S.; and Xu, Yingchen. 2024. Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India. IFPRI Discussion Paper 2288. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/162767 |
| spellingShingle | smallholders land rights loans livelihoods weather credit remote sensing access to finance gender impact assessment insurance Kramer, Berber Pattnaik, Subhransu Ward, Patrick S. Xu, Yingchen Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title | Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title_full | Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title_fullStr | Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title_full_unstemmed | Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title_short | Impacts of an innovative credit + insurance bundle for marginalized farmers: Evidence from a cluster randomized trial in Odisha, India |
| title_sort | impacts of an innovative credit insurance bundle for marginalized farmers evidence from a cluster randomized trial in odisha india |
| topic | smallholders land rights loans livelihoods weather credit remote sensing access to finance gender impact assessment insurance |
| url | https://hdl.handle.net/10568/162767 |
| work_keys_str_mv | AT kramerberber impactsofaninnovativecreditinsurancebundleformarginalizedfarmersevidencefromaclusterrandomizedtrialinodishaindia AT pattnaiksubhransu impactsofaninnovativecreditinsurancebundleformarginalizedfarmersevidencefromaclusterrandomizedtrialinodishaindia AT wardpatricks impactsofaninnovativecreditinsurancebundleformarginalizedfarmersevidencefromaclusterrandomizedtrialinodishaindia AT xuyingchen impactsofaninnovativecreditinsurancebundleformarginalizedfarmersevidencefromaclusterrandomizedtrialinodishaindia |