Moderating Effect of Index Based Livestock Insurance on Factors Affecting Performance of Livestock Projects in Northeastern Kenya

Abstract

Livestock represents the majority of household wealth and accounts for more than two-thirds of average family income in arid and semi-arid regions of Kenya. In the past century, 28 significant droughts have occurred in northern Kenya, four of which have been in the last decade, resulting in severe livestock mortality. Several projects, with approaches or models for managing risk including provision of micro-insurance for low-income people, were implemented to cushion the pastoralists from loss of livelihood as result of the droughts. This study investigated the moderating effect of Index Based Livestock Insurance on factors affecting the performance of livestock projects in northeastern Kenya and determined how socio-cultural factors, economic features, political situation, and external factors contribute to this effect. The hypotheses formulated are developed around the theories of the push-pull model, risk management and project performance. Statistical models were used in testing the hypotheses and Copies of well-structured questionnaires was administered to the sampled population which was randomly selected using multi-stage random sampling technique. The study used cross-sectional design, targeting household heads. The multistage sampling procedure was used to select the households head within the villages. Quantitative data was collected and analyzed using statistical models such as Analysis of variance (ANOVA), while multiple regression analysis was applied to measure moderating effect of Index Based Livestock Insurance on the factors - political situation, socio-cultural values, and economic features. The study, using Pearson correlation coefficient, found out that there was a weak positive linear relationship between socio-cultural factors and performance of livestock projects in Northeastern Kenya. The study also found out that there was no significant relationship between economic features and performance of livestock projects in north-eastern Kenya. It was equally observed that there was a weak positive relationship between political situations such as security and conflict and performance of livestock projects in the region under study. This notwithstanding, `external dynamics such as social cultural factors, economic factors and political situations were observed to have significant relationship on the performance of livestock projects. However, upon introduction of moderating variable into independent variables (social cultural factors, economic factors and political situations) the study observed an insignificant impact on the performance of the livestock projects. The study recommends that in order to improve project performance, project managers need to be cognizant of the fact that group norms can affect individuals’ behaviour. As such factors such as religion, culture, norms and values should be factored in before any project takes off. Project beneficiaries and participants need to be educated on the benefits of adopting modern risk mitigation xxi strategies such as offloading livestock during drought seasons. Involvement of community leaders would be key in ending conflicts and enhancing security in the regions. Finally, the study recommends that the government improves transport and communication infrastructure in northern eastern Kenya to facilitate access to markets, coordination of community mobilization, and security, which are essential for project success in the region.