An Assessment of the National Agricultural Insurance Scheme (NAIS)

Principal Investigators: Dr. Ketki Sheth
Research Team: Suraj Nair, Divya Mary
LEAD Centre: Centre for Microfinance (CMF)
Focus Area: Credit, Insurance and Agriculture
Project Geography: India
Partner: University of California, Merced
Status: Ongoing


Despite farming being the primary activity for a large majority of the world’s poor, lending to long-cycle agriculture is inhibited by concerns of crop failure. In India, the National Agricultural Insurance Scheme (NAIS) and its predecessor, the Comprehensive Crop Insurance Scheme (CCIS) are natural experiments to understand whether insuring agricultural credit portfolios result in lenders expanding agricultural credit. Agricultural loans are required to be insured under these schemes and therefore banks and farmers are protected against defaults on agricultural loans. This suggests that suppliers should hence be more willing to lend credit, and farmers more willing to demand credit and thereby increase investments in agricultural productivity. The project aims to evaluate the NAIS scheme in terms of coverage, payouts and other relevant outcomes, and understand the causal linkages between insured lending portfolios and agricultural credit flows.