ROLE OF INSURANCE IN AGRICULTURAL LENDING

Purpose: This paper examines the role of insurance in providing loans for agricultural sector. There are many agricultural hazards that cannot be insured on a financially sound basis; nonetheless, there is room for enhanced insurance coverage of farm assets, of the life and health of individuals living in rural areas, and of certain specific dangers that affect crop and livestock production. Methodology: A desktop literature review was used for this purpose. Relevant seminal references and journal articles for the study were identified using Google Scholar. The inclusion criteria entailed papers that were not over 5 years old. Findings: The insurance framework in agricultural lending that has been presented calls for the participation of policymakers and implementers in addition to marketing channels and micro users. Agricultural insurance penetration based on the research of both the demand and supply side and it might be used as a tool for lowering the level of physical risk. Unique Contribution to Theory, Policy and Practice: It is necessary to have experts, researchers, and extension agents step up their guidance and supervision efforts. Because it was difficult to discover a source of long-term funding or sponsorships, international and regional technical assistance, expertise, and financial support were urgently required.