Promoting Improved Production Technologies Among Smallholder Farmers in Ghana Via Interlinked Credit and Index Insurance Contracts

This study was a 3-year program of research, outreach, and education designed to promote use of index insurance to expand access to credit and increase adoption of improved production practices among African smallholders in the Northern region of Ghana. ACET conducted Randomized Control Trials (RCT) to test whether index insurance backed contingent credit can reduce impact of widespread agricultural loan defaults in the wake of adverse systemic events, allowing lenders to expand access to credit among smallholders and reduce interest rates. The work entailed coordination of 300 farmer based organizations, 12 rural banks, and one insurance company. The study found that index-insured agricultural loans increased access to credit for smallholder farmers, which enabled the adoption of more productive agricultural technologies.