Promoting Adoption of Improved Production Technologies among Smallholders in Ghana via Coupled Credit and Index Insurance Contracts

Last registered on August 14, 2018

Pre-Trial

General Information

Title

RCT ID

AEARCTR-0003231

Initial registration date

August 13, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

August 14, 2018, 10:00 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

Ghana

Region

Primary Investigator

Name

Abdoul G. Sam

Affiliation

The Ohio State University

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Francis Mulangu

PI Affiliation

Millennium Challenge Corporation

Contact Investigator

PI Name

Mario J. Miranda

PI Affiliation

The Ohio State University

Contact Investigator

Additional Trial Information

Status

Completed

Start date

2015-02-16

End date

2017-04-30

Keywords

Agriculture, Finance & Microfinance

Additional Keywords

Risk and Insurance

JEL code(s)

O1, O13, O16

Secondary IDs

Abstract

The Ohio State University and the African Center for Economic Transformation, in collaboration with the University of Ghana, propose to undertake a three-year program of research, outreach, and education designed to promote the adoption of improved production practices among Ghanaian smallholders. OSU/ACET is committed to rigorously testing through randomized control trails and other relevant methods the hypotheses that coupling index insurance with production loans that require any indemnity payment to be first applied to outstanding loans will reduce the impact of widespread agricultural loan defaults on lenders during adverse systemic natural events, thereby allowing lenders to expand access to credit among smallholders and reduce the interest rates they charge on agricultural production loans. OSU/ACET will use as its laboratory the index insurance initiatives being introduced by the Ghana Agricultural Insurance Programme (GAIP), an organization of 19 Ghanaian insurance companies whose primary mission is to assist members in creating, designing, rating and implementing crop insurance products in Ghana. OSU/ACET will build capacity in Ghana through extensive outreach aimed at agricultural insurers, agricultural lenders, value chain participants, farmer groups, and agricultural policymakers and through educational initiatives involving the University of Ghana’s PhD program in Applied Agricultural Economics and Policy.

External Link(s)

Registration Citation

Citation

Miranda, Mario J., Francis Mulangu and Abdoul G. Sam. 2018. "Promoting Adoption of Improved Production Technologies among Smallholders in Ghana via Coupled Credit and Index Insurance Contracts." AEA RCT Registry. August 14. https://doi.org/10.1257/rct.3231-1.0

Former Citation

Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)

The intervention of our experiment is drought-based index insurance in northern Ghana. We worked with our local partner, Ghanaian Agricultural Insurance Pool, to design two identical types of drought index-insurance that are attached to agricultural loans obtained by farmers; we call these insured loans. The first type is called micro-insured loan where the credit is insured for 100% of its value and the payouts go to the farmers. The second type is called meso-insured loan where the credit is insured 100% of its value and the payouts go to the agricultural banks i.e., the lending institution.

Intervention Start Date

2015-04-16

Intervention End Date

2016-04-30

Primary Outcomes

Primary Outcomes (end points)

Credit access: demand and supply of agricultural loans, demand for index insurance depending on product design, agricultural technology adoption

Primary Outcomes (explanation)

N/A

Secondary Outcomes

Secondary Outcomes (end points)

Agricultural production in terms of yields and land use (acres planted)

Secondary Outcomes (explanation)

Experimental Design

The identification strategy of this study is the randomization of farmer groups with two treatment arms and one control arm. Farmer groups in our control category are offered a basic loan with no requirement of insurance. Farmer groups in Treatment 1 category are required to take out an insured loan, with the insurance indemnity flowing to the farmer if triggered. Similarly, farmer groups in Treatment 2 are required to take out an insured loan with the insurance indemnity transferred to the lender and not the farmer for the purpose of forgiving part or all of the loan. For both treatments, the insurance premium is covered in full by the project. The timeline of the intervention is as follows:
Feb-March 2015: Baseline survey
April 2015: 1st Intervention -- loan officers met with farmer groups, described their loan type, and invited them to apply.
Feb-Mar 2016: Follow-up survey
April 2016: 2nd Intervention -- loan officers met with farmer groups, described their loan type, and invited them to apply.
Feb-Mar 2016: Endline survey

Experimental Design Details

Randomization Method

Stratified randomization using Excel and Stata

Randomization Unit

Farmer groups

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

258 farmer groups

Sample size: planned number of observations

774 farmers

Sample size (or number of clusters) by treatment arms

86 Control farmer groups, 86 Treatment 1 farmer groups, and 86 Treatment 2 farmer groups

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB

Institutional Review Boards (IRBs)

IRB Name

The Ohio State University

IRB Approval Date

2014-12-08

IRB Approval Number

2014B0442

Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?

Yes

Intervention Completion Date

April 30, 2016, 12:00 +00:00

Data Collection Complete

Yes

Data Collection Completion Date

April 30, 2017, 12:00 +00:00

Final Sample Size: Number of Clusters (Unit of Randomization)

258 farmer groups

Was attrition correlated with treatment status?

Final Sample Size: Total Number of Observations

779 farmers in baseline and follow-up each, and 774 in endline

Final Sample Size (or Number of Clusters) by Treatment Arms

86 control farmer groups, 87 Treatment 1 farmer groups, and 85 Treatment 2 farmer groups

Data Publication

Is public data available?

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Program Files

Reports, Papers & Other Materials

Relevant Paper(s)

Abstract

This is a blogpost written for our funding partner, USAID BASIS, by one of the GAs, Khushb Mishra, based on preliminary analysis of our data.

Citation

URL

https://www.agrilinks.org/post/when-loans-are-insured-women-farmers-risk-investing-productivity

Reports & Other Materials

Description

We completed the baseline, followup, and endline surveys. The analysis in on its way, however, our preliminary results show that coupling drought index insurance with loans increases the likelihood of loan approval by the banks, i.e., reduces supply side

Citation

Miranda, Mario, Francis Mulangu, and Abdoul G. Sam. "Annual Activity Report, For Reporting Year October 1, 2014ÐSeptember 30, 2015," August 06, 2015.

URL

https://www.dropbox.com/s/4smta1a6iy0w2p8/OSUACET%20BASIS%20Project%20Annual%20Report%202015%20-%20Annual%20Activity%20Report.docx?dl=0