Risk, coping mechanisms, and factors in the demand for micro-insurance in Ethiopia



This paper is the result of a policy study carried out for the International Labour Organization (ILO) and the United Nations Capital Development Fund (UNCDF), to determine how microinsurance can help Ethiopia’s poor become more resilient to negative financial shocks. The research focuses on the demand components of microinsurance, and investigates two main research questions: Do low-income households in Ethiopia need insurance? If so, would they be willing to buy it if it were made widely available?The study answered these two questions through a literature review and qualitative research in four socioeconomic systems of Ethiopia: low-income urban workers in Addis Ababa, agro-pastoralists in Hagere Mariam, Oromia, pastoralists in Yabello, Oromia, and coffee farmers in the Southern Nations, Nationalities and People’s Region (SNNPR). In addition, this study draws upon research from Oxfam America’s weather insurance pilot in Tigray. The results of this study indicate the answer to both research questions is affirmative, though the final outcome of the second question depends largely upon whether the eventual supply of insurance products is affordable and truly client-centered. The study recommends the Ethiopian government to take adequate consumer protection measures to ensure the healthy development of this infant industry.






Million Tadesse, Marjorie Brans,


Journal of Economics and International Finance

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