nep-mfd New Economics Papers
on Microfinance and Financial Development
Issue of 2005‒07‒18
one paper chosen by
Ana Ogarrio
Kennedy School, Harvard University

  1. Risk Management for the Poor and Vulnerable By Ari A. Perdana

  1. By: Ari A. Perdana (Centre for Strategic and International Studies)
    Abstract: 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.
    Keywords: poverty, vulnerability, risk management, microfinance
    JEL: E21 E51 E52
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:eab:macroe:527&r=mfd

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