Mapping Administrative Models for Cost Effective Microinsurance Delivery to Rural Farmers

Abstract

The administrative overheads and logistics costs of providing microinsurance in rural areas for underprivileged farming communities is relatively high for rural-based microfinance organizations. This study responds to the challenge by providing a systematic mapping of administrative models for cost-effective microinsurance distribution, by learning from the literature and frameworks of microcredit, agricultural extension, and community-based finance. By developing a heuristic (ideal-type) taxonomy based on best practices, the paper classifies the range of organizational structures and governance models with attention to the functions that digital platforms, community-liaison networks, and tiered decentralization play. Proxies for key indicators such as administrative cost per policy, customer outreach rate, scalability potential, and system flexibility are amalgamated to underpin the comparison of the models. The taxonomy brings the trade-offs of centralization, automation, and local participation be explained by showing how they relate to auxiliary dimensions related transaction cost reduction, scalability, and policyholder trust. Results of the study provide actionable recommendations to practitioners and policy makers about how better administrative decisions can increase efficiency and inclusiveness of microinsurance provision. The main originality consists in a hands-on guide for the choice or design of management models adapted to the specificity of rural microfinance environments, enhancing the development of microinsurance systems that are more inclusive and sustainable.