Increasing agricultural efficiency via technology adoption remains a high priority among development practitioners. One potential tool for furthering this objective is using drought index insurance to increase access to credit. Accordingly, the objective of this paper is to investigate whether coupling agricultural loans with micro-level and meso-level drought index insurance can stimulate the demand and supply of credit and increase technology adoption.

To this end, in partnership with 14 rural banks and the Ghana Agricultural Insurance Pool, the research team implemented a randomized control trial in northern Ghana that targeted maize farmers organized in credit groups. Their empirical analysis indicates that coupling loans with meso-insurance increases the likelihood of loan approval by 23 percentage points. Gender-level analysis shows that micro-insurance-coupled loans increase the likelihood of loan application for females while meso-insurance-coupled loans increase the likelihood of loan approval for both females and males, but with a larger impact for males. Overall, our results indicate that insured loans hold significant promise for expanding credit access and technology adoption among smallholder farmers.