wharton.upenn.edu). The authors are grateful to the four anonymous JMR

Recent financial liberalization in emerging economies has led to the rapid introduction of new financial products. Lack of experience with finan-cial products, low levels of education, and low financial literacy may slow adoption of these products. This article reports on a field experiment that offered an innovative new financial product, rainfall insurance, to 600 small-scale farmers in India. A customized financial literacy and insur-ance education module communicating the need for personal financial management and the usefulness of formal hedging of agricultural pro-duction risks was offered to randomly selected farmers in Gujarat, India. The authors evaluate the effect of the financial literacy training and three marketing treatments using a randomized controlled trial. Financial edu-cation has a positive and significant effect on rainfall insurance adoption, increasing take-up from 8 % to 16%. Only one marketing intervention, the money-back guarantee, has a consistent and large effect on farmers’ purchase decisions. This guarantee, comparable to a price reduction of approximately 40%, increases demand by seven percentage points