This paper is the first result of a policy study carried out for the International Labour Organization (ILO)
and the United Nations Capital Development Fund (UNCDF), to determine how micro-insurance can help
Ethiopia’s poor become more resilient to negative financial shocks. This research focuses on the
demand components of micro-insurance, and investigated two main research questions: Do lowincome
households in Ethiopia need insurance? If so, would they be willing to buy it if it were made
widely available? This study answered these two questions through the combination of a thorough
literature review and original qualitative research in four socioeconomic systems of Ethiopia: lowincome
urban workers in Addis Ababa; agro-pastoralists in Hagere Mariam, Oromia; pastoralists in
Yabello, Oromia; and coffee farmers in the Southern Nations, Nationalities and People’s Region
(SNNPR). In addition, this study drew upon original research from Oxfam America’s weather insurance
pilot in Tigray. The results of this study indicate the answer to both research questions is affirmative,
though the final outcome of the second question depends largely upon whether the eventual supply of
insurance products is affordable and truly client-centered. Study recommend the Ethiopian government
to take adequate consumer protection measures to ensure the healthy development of this infant
industry.