Microfinance bundling and consumer protection: experimental evidence from Colombia

Jonathan Bauchet, Amy Damon and Vance Larsen

Journal of Development Effectiveness, 2017, vol. 9, issue 4, 443-461

Abstract: Bundling micro-insurance with loans should help not only decrease costs and therefore increase take-up but may also decrease financial inclusion if the insurance and/or loan are refused. We implement a randomised control trial in which a voluntary crop micro-insurance product is offered jointly with a loan application or separately (at a later date). The delayed offer of insurance did not influence overall insurance take-up or coverage amount but had heterogeneous impacts by crop, supporting the idea that bundling microfinance products is an opportunity more than a constraint. Yet, low product understanding also highlights the need for well-designed and effective consumer protection policies.

Date: 2017
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DOI: 10.1080/19439342.2017.1363802

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