This paper reviews some literatures on the mechanisms available for the poor in managing risk. Lacking access to formal mechanisms of risk management, the poor rely on informal mechanisms, which are built based on the existing social networks and trust. But when the shocks are big or affecting the entire community, these informal mechanisms may not be adequate. Some policy interventions are then required to help improving the ability of poor people in managing risk. Policy intervention should aim to provide access for the poor on saving, credit and insurance. Microfinance schemes have been applauded as a successful `best practice' in providing access to saving and credit. However, microfinance institutions still have some room for improvement by expanding their role in providing insurance schemes.
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Paper provided by Centre for Strategic and International Studies, Jakarta, Indonesia in its series CSIS Economics Working Paper Series with number
WPE093.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Francis Bloch (GREQAM and Universite de la Mediterranee), Garance Genicot (Georgetown University, and Debraj Ray (New York University and Instituto de Analisis Economico (CSIC)), .
"Informal Insurance in Social Networks,"
Working Papers
gueconwpa~04-04-16, Georgetown University, Department of Economics.
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