Insurance seems to matter more for people's life choices and for economic development than previously understood. A recent study by the ILO found that farmers in Ghana who were randomly assigned to receive insurance cover increased their agricultural investment significantly, in some cases up to 65%. By contrast, those assigned to receive credit demonstrated little change in their investment behavior.The study indicates that often the problem is not the absence of capital, but the omnipresence of risks, preventing people from making worthwhile investments in the future. With severe and often catastrophic risks removed, low-income people can take leaps such as planting higher-yield crops or starting businesses. They can raise their incomes and permanently change their families' prospects.
The Second Wave Of Mobile Financial Services In Africa And Asia: LeapFrog Announces Investment In BIMA, Bringing Insurance To Millions
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