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Risk management for the poor and vulnerable



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.

Suggested Citation

  • Ari A. Perdana, 2005. "Risk management for the poor and vulnerable," CSIS Economics Working Paper Series WPE093, Centre for Strategic and International Studies, Jakarta, Indonesia.
  • Handle: RePEc:sis:wpecon:wpe093

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    References listed on IDEAS

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    More about this item


    poverty; vulnerability; risk management; microfinance.;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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