Do Farmers Demand Innovative Financial Products? A Case Study in Cambodia
Article
Wang, Qingxia, Soksophors, Yim, Phanna, Khieng, Barlis, Angelica, Mushtaq, Shahbaz, Rodulfo, Danny and Swaans, Kees. 2023. "Do Farmers Demand Innovative Financial Products? A Case Study in Cambodia." Journal of Risk and Financial Management. 16 (8). https://doi.org/10.3390/jrfm16080353
Article Title | Do Farmers Demand Innovative Financial Products? A Case Study in Cambodia |
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ERA Journal ID | 213440 |
Article Category | Article |
Authors | Wang, Qingxia, Soksophors, Yim, Phanna, Khieng, Barlis, Angelica, Mushtaq, Shahbaz, Rodulfo, Danny and Swaans, Kees |
Journal Title | Journal of Risk and Financial Management |
Journal Citation | 16 (8) |
Article Number | 353 |
Number of Pages | 12 |
Year | 2023 |
Publisher | MDPI AG |
Place of Publication | Switzerland |
ISSN | 1911-8066 |
1911-8074 | |
Digital Object Identifier (DOI) | https://doi.org/10.3390/jrfm16080353 |
Web Address (URL) | https://www.mdpi.com/1911-8074/16/8/353 |
Abstract | This study examines Cambodian farmers’ demand for weather index insurance (WII), an innovative financial product, for managing climate change-related risks. Rice and cassava farmers in Battambang Province of Cambodia were interviewed to understand their preferences for WII. We applied a binary logistic model to quantify the factors that influence farmers’ WII demand. We discovered that farmers’ marital status and off-farm labor are crucial factors that impact the demand for WII. More importantly, we also investigated gender differences, considering the critical role of women in the agricultural sector and personality differences between men and women. Our findings indicated that for male respondents, being married and having an additional off-farm laborer increase the probability of demand for WII by 72.6% and 36.8%, respectively. For female respondents, the education level is the most significant factor in making purchase decisions. An additional year of education increases the probability of WII demand by 5.0%. Generally, our results are consistent with some prior studies but inconsistent with others. This suggests that further research is necessary to understand the barriers associated with WII schemes and how to overcome them. Regardless, our study provides valuable insights for various stakeholders in implementing WII schemes, including financial professionals, insurance companies, communities, and governments, for designing more flexible WII products, improving farmers’ financial literacy, and providing effective post-event support to enhance farmers’ resilience to climate change. |
Keywords | climate change; innovative financial product; risk transfer; weather index insurance (WII) |
ANZSRC Field of Research 2020 | 3002. Agriculture, land and farm management |
Byline Affiliations | Centre for Applied Climate Sciences |
International Institute of Rural Reconstruction, Cambodia | |
Alliance of Bioversity International and International Center for Tropical Agriculture (CIAT), Vietnam | |
Centre for Applied Climate Sciences (Operations) | |
Alternative Risk Transfer Solutions, United Kingdom |
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https://research.usq.edu.au/item/z2716/do-farmers-demand-innovative-financial-products-a-case-study-in-cambodia
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