Enrolment in Micro Life and Health Insurance: Evidences from Sri Lanka

Microinsurance is an emerging concept protecting households from the potentially catastrophic expenditures associated with family related shocks. Therefore, this paper presents evidence on the determinants of insurance participation using probit models on household survey data from Sri Lanka, conditional on household's microfinance institution enrolment. Further, we employ multivariate probit regressions to analyse factors affecting the participation in different types of insurance. We find that the household’s experience of a family related shock is positively associated with the participation in micro health insurance schemes under study. There is strong evidence that microinsurance has not yet succeeded in proportionately reaching the most vulnerable households. Notably, education of the household head is a strong determinant of microinsurance participation.microinsurance, household behaviour, Sri Lanka

Risk Management among the Poor: The Case of Microfinancial Services

This paper argues that the level of financial services provision determines the risk management strategies among the poor. The paper estimates the determinants of the household’s use of one, two or all three types of microfinancial services applying ordered probit models and additionally probit models for combinations of them. By doing this on household survey data from Sri Lanka, there is empirical evidence that household's probability to participate in microfinancial services increases with rising self perception towards risk. Further, we find that it depends highly on the type of risk, if a household is more or less likely to use microfinancial services in Sri Lanka, whereas the accessibility to one, two or three microfinancial services is determined by the experience of specific hazards in the past. The study finds that the poor are less likely to use microfinancial services than their better off counterparts.financial markets, financial services, microinsurance, Sri Lanka, South Asia

Risk management among the poor: The case of microfinancial services

This paper argues that the level of financial services provision determines the risk management strategies among the poor. The paper estimates the determinants of the household's use of one, two or all three types of microfinancial services applying ordered probit models and additionally probit models for combinations of them. By doing this on household survey data from Sri Lanka, there is empirical evidence that household's probability to participate in microfinancial services increases with rising self perception towards risk. Further, we find that it depends highly on the type of risk, if a household is more or less likely to use microfinancial services in Sri Lanka, whereas the accessibility to one, two or three microfinancial services is determined by the experience of specific hazards in the past. The study finds that the poor are less likely to use microfinancial services than their better off counterparts

Enrolment in micro life and health insurance: Evidences from Sri Lanka

Microinsurance is an emerging concept protecting households from the potentially catastrophic expenditures associated with family related shocks. Therefore, this paper presents evidence on the determinants of insurance participation using probit models on household survey data from Sri Lanka, conditional on household's microfinance institution enrolment. Further, we employ multivariate probit regressions to analyse factors affecting the participation in different types of insurance. We find that the household's experience of a family related shock is positively associated with the participation in micro health insurance schemes under study. There is strong evidence that microinsurance has not yet succeeded in proportionately reaching the most vulnerable households. Notably, education of the household head is a strong determinant of microinsurance participation

Savings, Credit and Insurance : Household Demand for Formal Financial Services in Rural Ghana

This paper argues that the study of the demand for financial services in developing countries leaves out part of the story, if it looks at only one of the three elements of the so called finance trinity, i.e. savings products, loans, or insurances, as is largely done in the literature. In contrast to previous research, it is assumed that households’ choice for any of these services is strongly interconnected. Therefore, the paper simultaneously estimates the determinants of household demand for savings, loans and insurances by applying a multivariate probit model on household survey data from rural Ghana. On the one hand, the estimation results confirm the common finding that poorer households are less likely to participate in the formal financial sector than better off households. On the other hand, there is empirical evidence that the usage of savings products, loans and insurances does not only depend on the socio-economic status of households, but also on various other factors, such as households’ risk assessment and the past exposure to shocks. In addition, trust in the providing institution and its products appear to play a key role.Bei der Betrachtung der Nachfrage nach Finanzdienstleistungen in Entwicklungsländern spiegelt die bisherige Literatur nur einen Teil des Gesamtbildes wider, da sie sich hauptsächlich auf eines der drei Elemente der so genannten „finance trinity“ – Sparprodukte, Kredite und Versicherungen – beschränkt. Im Gegensatz dazu wird hier unterstellt, dass die Entscheidungen von Haushalten für oder gegen die Verwendung jedes dieser Produkte eng miteinander verknüpft sind. Deshalb werden die Determinanten für die Nachfrage nach Sparprodukten, Krediten und Versicherungen simultan geschätzt, und zwar mit Hilfe eines multivariaten Probit-Modells auf der Grundlage von Haushaltsdaten aus einem ländlichen Gebiet Ghanas. Einerseits stützen die Resultate frühere Erkenntnisse aus der Literatur, nämlich dass ärmere Haushalte mit geringerer Wahrscheinlichkeit als besser gestellte Haushalte am formalen Finanzmarkt teilnehmen. Andererseits belegen die empirischen Ergebnisse, dass die Verwendung von Sparprodukten, Krediten und Versicherungen nicht allein vom sozioökonomischen Status der Haushalte, sondern auch von verschiedenen anderen Faktoren, wie der Selbsteinschätzung der Risikosituation seitens der Haushalte und der Erfahrung von Schocksituationen in der Vergangenheit, abhängen. Zudem scheint das Vertrauen in die Finanzinstitution, ihre Produkte und Mitarbeiter eine entscheidende Rolle zu spielen

Uptake of Multiple Microinsurance Schemes: Evidence from Sri Lanka

Since it is common among households to use more than one form of microinsurance, this paper estimates the uptake of different kinds of microinsurance by the same population. We use a multivariate probit model which examines the participation in the different forms of insurance simultaneously. By doing this, we can establish whether participation patterns in different types of microinsurance options indicate if the participation in specific insurance schemes is complementary or a substitute. We establish that membership of a microfinance institution means that households are more likely to have purchased an insurance policy. Furthermore, the study describes a need for more inclusive and composite packages of microinsurance products for greater financial inclusion of the poor

Empirical Analysis of Participation Patterns in Microfinancial Markets: The Cases of Ghana and Sri Lanka

This book contributes to the empirical literature on households’ participation in microfinancial services in developing countries. First, it estimates simultaneously the participation in microinsurance schemes and other financial services on household survey data from Ghana. Second, it analyzes the household’s cumulative participation in microfinancial services using household survey data from Sri Lanka. Next, the study focuses on the question whether household’s participation in micro life insurance in Sri Lanka is motivated by the desire to leave bequests. At last, it investigates different sequential steps of the household’s microinsurance participation decision and the joint analysis of micro life and health insurance enrolment in Sri Lanka

Empirical Analysis of Participation Patterns in Microfinancial Markets

This book contributes to the empirical literature on households’ participation in microfinancial services in developing countries. First, it estimates simultaneously the participation in microinsurance schemes and other financial services on household survey data from Ghana. Second, it analyzes the household’s cumulative participation in microfinancial services using household survey data from Sri Lanka. Next, the study focuses on the question whether household’s participation in micro life insurance in Sri Lanka is motivated by the desire to leave bequests. At last, it investigates different sequential steps of the household’s microinsurance participation decision and the joint analysis of micro life and health insurance enrolment in Sri Lanka