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Insurance, Credit and Safety Nets for the Poor in a World of Risk

Author

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  • Daniel Clarke
  • Sefan Dercon

Abstract

This paper asks how insurance can be more effectively delivered to the poor, and what its role should be relative to other microfinance programmes, safety nets and informal insurance systems. We focus on the various interactions, including how insurance may crowd out credit and informal insurance, and implications for the design of insurance schemes. We argue that well-designed insurance schemes, building on existing informal systems, and focusing on catastrophic and serious covariate risks, could offer protection against risk and contribute to poverty reduction beyond the combined impact of microcredit programmes, safety nets and existing informal mutual support systems.

Suggested Citation

  • Daniel Clarke & Sefan Dercon, 2009. "Insurance, Credit and Safety Nets for the Poor in a World of Risk," Working Papers 81, United Nations, Department of Economics and Social Affairs.
  • Handle: RePEc:une:wpaper:81
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    File URL: http://www.un.org/esa/desa/papers/2009/wp81_2009.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Risks; Microcredit; Microinsurance; Safety nets;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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