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

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. It focuses
on the various interactions, including how insurance may crowd out credit and informal insurance,
and implications for the design of insurance schemes. The authors 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.