2015년 9월 21일 월요일

[발췌: D. Collins et al's Portfolios of the Poor] 3. Dealing with Risk

출처: Daryl Collins, Jonathan Morduch, Stuart Rutherford & Orlanda Ruthven, ^Portfolios of the Poor: How the World’s Poor Live on Two Dollars a Day^, Princeton University Press, 2009.
자료: http://www.portfoliosofthepoor.com/book.asp; 구글도서; ...


※ 발췌 (excerpts): pdf p. 76/85~

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Chapter 3


In 1974, Jaleela and her baby fell seriously ill with dysentery. Jaleela, one of our Bangladeshi respondents, recalled the acute difficulty she then faced. The family had no savings to speak of, and her husband was unable to raise loans quickly enough to pay for treatment. He resorted to mortgaging her marriage jewelry to a pawnbroker. Happily, mother and child survived, though the jewelry was lost. Years later, her husband, a rickshaw driver, fell ill and couldn’t work, and the family went hungry for three days until a neighbor supplied them with food. Then in 1992, Jaleela again fell seriously ill. She used a microfinance loan for treatment, but that wasn’t enough: she had to draw down all her savings before she was cured.
  • To be poor in Bangladesh, India, or South Africa is to live not only with the difficulties of managing life on a day-to-day basis, but, like Jaleela’s family, to live with the risk of large-scale disruption to lives and livelihoods. ( ... ... )
  • In the previous chapter, we saw how the diary households went about stretching small, awkwardly timed incomes to ensure that they were able to put food on the table every day and fulfill other needs that arose. To achieve these basic objectives, they were driven to frequent small-scale intermediation, resulting in portfolios characterized by turnovers that were large relative to incomes, and which passed through many different kinds of financial instruments, most of them informal. The diaries revealed poor households to be active money managers, in search of flexible and reliable financial tools suited to their cash flows.
   The financial diaries are also full of tales about the anxiety that comes from anticipating emergencies and dealing with them when they occur. Risk is omnipresent, despite the overall economic and political stability in the three countries we study. This chapter looks at the financial impact of these risks.
  • We show how poor households cope, and describe the financial tools and strategies they have developed to shelter themselves. 
  • Self-help, of course, is no substitute for access to public safety nets and commercially based insurance. 
  • Neither typically exists in sufficient quality or quantity in poor communities, however, and we show how the diary households seize the tools at hand. Those tools offer protections that are too often fragile and incomplete, and we describe the improvements that can come from better access to insurance and, importantly, flexible ways to save and borrow.

   ( ... ... ) All the same, much “insurance” was obtained through the same informal relationships with neighbors and relatives that, as we saw in the previous chapter, are used to deal with day-to-day money management needs.
  • ( ... ... )
  • The portfolio approach offers a further perspective. It shows how households work to meet their needs by patching together sums of money from different sources. Single solutions are rarely comprehensive, but they don’t need to be so in order to be useful. While desirable in principle, comprehensive solutions can be complicated and expensive, raising the risk that they may never get off the ground or be sustainable. The portfolio approach shows the power of well thought-out partial solutions. Nowhere is this clearer than in examples of how South African households patch together resources for funerals.

Living with Risk  (p. 78/87)

   ( ... ... )

   During the research year, a total of 167 financial emergencies were experienced by our diary households. Table 3.1 shows the most frequently occurring kinds of emergencies for the three countries. Serious injury and illness, as well as death itself, predominate, followed by major losses to income and property.

   ( ... ... )

Getting Protection  (p. 81/90)

   ( ... ... )

   Our diary households are not alone among poor people in being inadequately protected by insurance. Although many national surveys don’t even ask about insurance, those that do ask find that few respondents have it. One study reports that fewer than 6 percent of the extremely poor in a wide range of countries are covered by health insurance, for example.

   Family and neighbors play important roles in the absence of such formal insurance arrangements, and economists have started to quantify the degree to which the informal mechanisms fill in gaps. One line of research focuses on “village insurance,” where households in the same village “insure” each other against household-level shocks. In the diaries, we do find many cases of neighbors helping each other out, not only with cash-flow management, as we saw in the last chapter, but also in risk management, as we’ll see in this one.
  • Much of that help is given in the form of reciprocal gifts or flexible loans between relatives. But less often do we see an entire community combining resources to help one particular family in need. Many households do participate in informal financial groups, like savings clubs. Rarely, however, are these groups based on the notion of the whole village coming together to help out those of its members who get into trouble─they are, rather, based on a structure of self-insurance
  • Even in an example of informal insurance groups that we’ll introduce in this chapter, the burial societies of South Africa, membership is not given automatically to everyone in the village. Each household has to contribute payments, and payouts are rulebound and contingent on the amount paid in. This is not the “risk sharing” embedded in the concept of “village insurance.” 
  • Households actively seek ways to individually self-manage their own risks through a variety of financial instruments, including reaching out to relatives. This suggests, as does the literature on village insurance, that simply relying on one’s neighbors to help you out in an emergency is not enough─households (and extended kin networks) must and do try to self-insure.
   Some of our diary households were investing in financial tools specifically designed to protect against emergencies. The tools fall into a small number of distinct categories: life insurance in India, life insurance and credit-life insurance in Bangladesh, and funeral coverage in South Africa. Each offers lessons for creating better financial tools.

India: State-Sponsored Insurance for the Poor  (p. 92/91)

Bangladesh: “Pro-poor” Private Life Insurers and Credit-Life Coverage  (p. 85/94)

South Africa: Funeral Coverage  (p. 88/97)

Patching from Here and There  (p. 95/104)

   So far we have looked at the take-up of specialist instruments that are available to some of our diary households for dealing with risk: life and some other forms of insurance in India, life endowments and credit-life coverage in Bangladesh, and funeral coverage in South Africa. We turn now to what happens when an emergency actually occurs. ( ... ... )

Health Problems Are Financial Problems  (p. 99/108)

Two Sides of Moral Hazard  (p. 101/110)

Toward Better Tools  (p. 104/113)

   ( ... ... ) But the fact that the South African burial schemes stood out as unusual suggests that the difficulties of arranging insurance is one of the main weaknesses of the informal sector. To work, informal insurance schemes need to bind users together in associations that endure over long periods of time, a task that gets ever harder as populations become more mobile and occupations individualized.

   ( ... ... )

   Insurers need help reaching the poorer and more remote groups. One solution is to form partnerships between formal insurance companies (who have the know-how in the sophisticated areas of actuarial analysis and investment) and microfinance institutions (who have the outreach to large numbers of poor households). Such partnerships are already under way around the world. India, for example, had 35 micro health insurance schemes running in 2006, under this partner-agent model, with nearly 900,000 policyholders.

   ( ... ... )

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