Responsible bundling of microfinance services a mixed method evaluation of the impact of timing, pressure, and information
Financial institutions serving the poor can offer a range of savings, insurance, and even nonfinancial products in addition to their core credit products. Bundling these products into one packaged sale can be a cost effective distribution strategy and a means to differentiate the provider's offering by its added value to clients. However, it may also raise the risk of confusing clients who receive too much information at once and do not fully understand the secondary products they are offered or the risk that clients feel pressure (whether direct or indirect) to purchase those ancillary products. The authors partnered with Crezcamos, a microfinance institution in rural Colombia, to explore the influence of a joint sales strategy on the uptake, understanding, and recall of crop insurance products. The authors conducted a mixed methods evaluation of the delivery of a crop insurance product by a microfinance institution in rural Colombia. The study combines a randomized control trial with extensive qualitative research, exploring the purchase decisions, understanding, and perceptions of loan applicants who have been offered the product and collecting extensive qualitative feedback from the microfinance staff who offer it. The remainder of this paper is organized as follows: Section two summarizes the relevant literature; Section three offers an overview of the context, the insurance product, and how it is sold; Section four describes our study methodology; Section five describes our findings; and Section six concludes.