RESPONSIBLE BUNDLING OF MICROFINANCE SERVICES Affordable Cost was an important factor in customers’ purchase decisions, which suggest a high degree of price sensitivity that is consistent with prior studies of insurance demand. Lower take-up of the (more expensive) insurance for transitory crops is one reflection of this, as are the low levels of coverage that most clients purchased. Cost was particularly relevant for those with smaller farms and loan sizes, who bought smaller amounts of coverage (both in absolute size and in relation to the maximum amount they could have purchased) than other borrowers. As smaller, lower-income farmers may be more price sensitive than others, it may be useful to engage in a segmentation strategy that targets the smallest farms and/or loan sizes with a particularly small and affordable crop insurance option. Anecdotally, both clients and loan officers pointed to the importance of the government subsidy in making the product affordable. This is consistent with prior studies of agricultural insurance, which find higher take-up in programs with subsidies (Hill and Robles 2010; Cole et al. 2013). Understood By using both quantitative surveys and qualitative interviews, our study was able to gain insight into both clients’ initial understanding of the product and their later recall of product details. Overall, the information delivered to clients through the standardized sales protocol (particularly the video) was considered useful by both loan officers and clients in delivering information about a highly complex product effectively. These tools conveyed some of the most critical elements of the product that enabled clients to make a voluntary and informed purchase decision. Our qualitative interviews revealed that when the protocol was applied, clients understood the basic features of the crop insurance quite well: the events covered, the deductible portion that would not be covered, the government subsidy, the process for enrolling, and that an assessment would take place in the case of an insured event. Our study suggests that understanding can be tackled with appropriate and informative sales tools, and that even farmers with low levels of education and knowledge of insurance can understand the main features of a relatively complex product. These informational tools (video, worksheet, “key points,” and guided answers to common client questions), coupled with a strong awareness that a product is voluntary, appeared to effectively motivate farmers to make an informed choice as to whether to purchase crop insurance. Our study also points to important issues around the protection of low-income consumers. Specifically, when farmers felt less empowered, either because of their lack of certainty about the outcome of their loan process, or because of other dynamics, they may have felt subtle pressure to purchase the insurance. In such cases, having appropriate training, policies, and controls in place at the institutional level can help to reinforce the emphasis on voluntary sales by frontline staff. 6.3. Low recall suggests a need for ongoing support While clients understood the product’s main features in the moment it was explained to them, this understanding did not translate into lasting recall, even among those who purchased the product. Some customers failed even to remember whether they purchased the product, and a majority failed to recall the amount and events covered correctly. This information is essential to be able to use the insurance effectively. When clients do not remember having a policy, they will not make a claim unless reminded. When clients are not familiar with the claims process, they may not know how to initiate a claim or may have unrealistic expectations about a payout that is due. When clients have incorrect expectations of a payout, they may be disappointed to later receive a much lower amount. And when clients do not remember the insurance policy’s term or know how to renew, they may unintentionally experience a lapse in coverage. 29