Can Asset Transfer & Asset Protection Policies Alter Poverty Dynamics in Northern Kenya?

Project Description

This study examines the impacts that drought insurance and entrepreneurial graduation programs have on the extent and depth of poverty over time. Furthermore, we aim to identify prospective complementarities between the two approaches to social protection.

Graduation programs and drought insurance are being promoted as effective tools for reducing poverty. This project will examine two such programs—the Index-Based Livestock Insurance (IBLI) product and the Rural Entrepreneur Access Project (REAP)—both of which are currently operating in high-poverty regions of Northern Kenya and have received international support aimed at reducing poverty. 

 

Although there is a growing literature on the impacts of drought insurance and graduation programs, there is still much to learn. Furthermore, the cost-effectiveness of various implementation strategies and leveraging potential complementarities remains mostly unstudied.

Research Activities

We are implementing a randomized control trial (RCT) consisting of IBLI and REAP interventions in Samburu County of Kenya. The RCT contains four treatment arms: control, only REAP, only IBLI, and REAP + IBLI. A baseline, midline, and endline survey of 1,890 participating households will be collected in 2018, 2020, and 2022, respectively.

Interventions

Index Based Livestock Insurance (IBLI)

  • Insurance policies make payments when forage conditions are much worse than normal to protect households from drought.

  • Policies are sold by Takaful Insurance of Africa, a local insurance company, and reinsured in international markets.

  • The GoK is also making IBLI transfers to 18,000 targeted households under the Kenya Livestock Insurance Program (KLIP).

 

Rural Entrepreneur Access Program (REAP)

  • The program aims to help poor women graduate from poverty by helping them start sustainable businesses.

  • Eligible women are selected through community wealth ranking followed by household-level validation.

  • The program facilitates the formation of 3-women business groups that are the foundation of each intervention.

Progress to Date 

A baseline of 1,890 households was successfully collected in February/March of 2018. Please see the Baseline Survey Field Report for more information on the survey tool and collection activities.

 

As of December 2019, 435 study households have purchased insurance, insuring a total value of 159,000 USD.  The randomized discount coupons, meant to increase insurance uptake from recipients, were successful; receiving a coupon in 2018 increased the likelihood of purchasing insurance in 2018 from 4% to 41%.

 

The BOMA Project began REAP treatments in April 2018 and have enrolled 450, 3-women businesses to date (December 2019).

Outputs & Communications

Implementing Partners

  • The BOMA Project

  • Takaful Insurance of Africa


 

Funded by

BASIS: Feed the Future Innovation Lab for Assets and Market Access

 


Timeline

2018 - 2022

 


Contact

Nathan Jensen

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