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Does Microcredit Increase Household Welfare in the Absence of Microinsurance?

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  • Akotey, Joseph Oscar
  • Adjasi, Charles K.D.

Abstract

This study answers the question: Does a combination of microcredit and microinsurance improve the wellbeing of low-income households? We examine this challenge through Heckman sample selection, instrumental variable and treatment effect models. The findings indicate that households using microcredit in combination with microinsurance derive significant gains in terms of welfare improvement. Microcredit may be good but its benefit to the poor is enhanced and sustained if the poverty trapping risks are covered with microinsurance. To this extent, combining microcredit with microinsurance will empower the poor to make a sustainable exit from poverty.

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  • Akotey, Joseph Oscar & Adjasi, Charles K.D., 2016. "Does Microcredit Increase Household Welfare in the Absence of Microinsurance?," World Development, Elsevier, vol. 77(C), pages 380-394.
    • Handle: RePEc:eee:wdevel:v:77:y:2016:i:c:p:380-394
    DOI: 10.1016/j.worlddev.2015.09.005
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    2. Ma, Wanglin & Qiu, Huanguang & Fan, Yubing & Zhou, Xiaoshi, 2020. "The joint effects of ICT adoption and access to credit on household income in China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304431, Agricultural and Applied Economics Association.
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    4. Antonio E. Etrata & Fernando L. Trinidad, 2020. "Structural Equation Analysis of Microinsurance Dimensions: Basis for Sustainability Model of the Marginalized in the Philippines," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 228-236, July.
    5. Sodokin, Koffi & Djafon, Joseph Kokouvi & Dandonougbo, Yevessé & Akakpo, Afi & Couchoro, Mawuli K. & Agbodji, Akoété Ega, 2023. "Technological change, completeness of financing microstructures, and impact on well-being and income inequality," Telecommunications Policy, Elsevier, vol. 47(6).
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    7. Merrey, D. J. & Lefore, Nicole, 2018. "Improving the availability and effectiveness of rural and “Micro” finance for small-scale irrigation in Sub-Saharan Africa: a review of lessons learned," IWMI Working Papers H049027, International Water Management Institute.
    8. Dina Chhorn, 2018. "Effect of Microfinance on Poverty and Welfare: New Evidence from 9 provinces in Cambodia," Post-Print hal-02147272, HAL.
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    12. Rahul Nilakantan & Deepak Iyengar & Samar K. Datta & Shashank Rao, 2021. "On Ethical Violations in Microfinance Backed Small Businesses: Family and Household Welfare," Journal of Business Ethics, Springer, vol. 172(4), pages 785-802, September.
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    14. Seng, Kimty, 2019. "The Poverty-Reducing Effects of Financial Inclusion: Evidence from Cambodia," MPRA Paper 95726, University Library of Munich, Germany, revised 26 Aug 2019.
    15. Ahmad, Hamna & Hussain, Sadia & Nazif, Muhammad Ahmed, 2021. "Leveraging technology to promote women's health: Evidence from a pilot program," GLO Discussion Paper Series 939, Global Labor Organization (GLO).
    16. Joseph Dery Nyeadi & Victor Kunsofah Kunbuor & Ernest Domanaanmwi Ganaa, 2018. "Innovation and Firm Productivity: Empirical Evidence from Ghana," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 127-140, OCTOBER.
    17. Emmanuel Ofori & Kenichi Kashiwagi, 2022. "Impact of Microfinance on the Social Performance of Local Households: Evidence from the Kassena Nankana East District of Ghana," Sustainability, MDPI, vol. 14(10), pages 1-25, May.
    18. María José Roa & Alejandra Villegas & Ignacio Garrón, 2020. "Effects of interest rate caps on microcredit: evidence from a natural experiment in Bolivia," Development Research Working Paper Series 03/2020, Institute for Advanced Development Studies.

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