Altering Poverty Dynamics with Index Insurance: Northern Kenya's HSNP

Risk and realization of droughts and other large shocks in northern Kenya drive households into extreme poverty and make it difficult for them to escape once they are destitute. Mitigating risk should help alter these dynamics. Augmenting cash transfer programs with an insurance-based productive safety net should offer the following three key effects: stemming the downward spiral of vulnerable households, stabilizing pathways from poverty through asset accumulation and crowding-in finance for investment and growth.