Abstract:
The study determine determinants of participation in Crop Loan Insurance Scheme
(CLIS) in flood prone zones of Pakistan. The methodology of study is based on primary data i.e.,
collection through survey in three flood affected tehsils of Sargodha, namely, Shahpur, Sahiwaal,
and Behra. The data collection is based on multi-stage stratified random sampling. The total
sample size comprises of 146 farmers, 80 are loanee farmers (formal borrowers) and 66 are nonloanee
farmers (informal borrower). The quantitative techniques are comprised of descriptive
statistics, vulnerability indices, logistics regression and marginal effect estimation. The
qualitative techniques are comprised of three Focus Group Discussions (FGDs) with farmers in
each tehsils.
The results of vulnerability indices estimation reveal that borrowers of CLIS scheme are more
vulnerable as compared to non-borrowers. The reasons for their higher vulnerability are late
declaration of calamity, ineffective loss assessment, slow procedure of claim disburseme nt,
meager amount of claims, political influence in listing of disaster affected villages and delayed
credit payment operations. The results of logistic regression show that education, income,
experience, number of livestock, distance from river, amount of loss, documentation issues and
riskiness are significantly affecting loan taking behavior of farmers. However, religious reasons
and access to alternate sources of loan are not significantly affecting loan taking behavior of
farmers. This study concludes that the CLIS policy has not significantly reduced vulnerability of borrowing farmers. Finally, there is dire need for improvement in this scheme for which few recommendations are given. It is implied from this research that after recommended
improvements, this policy can become one of the effective climate resilient credit policy.
