Record Details

Bundling Health Insurance and Microfinance

Harvard Dataverse (Africa Rice Center, Bioversity International, CCAFS, CIAT, IFPRI, IRRI and WorldFish)

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Title Bundling Health Insurance and Microfinance
 
Identifier https://doi.org/10.7910/DVN/25890
 
Creator Banerjee, Abhijit
Duflo, Esther
Hornbeck, Richard
 
Publisher Harvard Dataverse
 
Description Microfinance institutions have started to bundle their basic loans with other financial services, such as health insurance. Using a randomized control trial in Karnataka, India, we evaluate the impact on loan renewal from mandating the purchase of actuarially-fair health insurance covering hospitalization and maternity expenses. Bundling loans with insurance led to a 16 percentage points (23 percent) increase in drop-out from microfinance, as many clients preferred to give up microfinance than pay higher interest rates and receive insurance. In a Pyrrhic victory, the total absence of demand for health insurance led to there being no adverse selection in insurance enrollment.
 
Subject Social Sciences