risk management final project pdf
TRANSCRIPT
HOUSEHOLD RISK MANAGEMENT Using Financial Services for Risk Management
ROLE OF HOUSEHOLD IN RISK MANAGEMENT
Being together in good and bad
times
Taking care in old age
Increasing labour supply
after an income shock
Putting in extra work hours in
case a working member is sick
Household members can help one another manage risk and pursue opportunity
TYPES OF RISKS FACED BY HOUSEHOLDS
➤ Income
➤ Health
➤ Natural disasters
➤ Death of earning member
EXAMPLE OF RISK MANAGEMENT BY HOUSEHOLD
Evidence on living arrangements in 17 developing countries shows that on average 28 percent of households have members over the age of 60, a signficantly higher
share than this age group represents in the total population
In China, 90 % of elderly with disabilities living with their families have access to support, compared
with 73 % of elderly living alone
Elderly People Frequently live with other family members
Source: Page 112, WORLD DEVELOPMENT REPORT 2014
BARRIERS TO HOUSEHOLD RISK MANAGEMENT
Lack of awareness
Low levels of coordination
between family members
Low levels of education and
skill base
Discrimination of one member /
gender
Lack of access to resources due to socio-economic
reasons
SOME EXAMPLES OF BARRIERS TO RISK MANAGEMENT
Source: Page 117, WORLD DEVELOPMENT REPORT 2014
SOME EXAMPLES OF BARRIERS TO RISK MANAGEMENT
Source: Page 117, WORLD DEVELOPMENT REPORT 2014
SOME EXAMPLES OF BARRIERS TO RISK MANAGEMENT
Source: Page 121 WORLD DEVELOPMENT REPORT 2014
USING FINANCIAL SERVICES TO MANAGE RISK
Savings
Loans Insurance
Pension
USING FINANCIAL SERVICES TO MANAGE RISK
SavingsSaving for planned and unplanned expenses
Planned e.g. School fees, business expenses, marriage Unplanned e.g. death and funeral, medical expenses, job loss
Loans Loans for consumption smoothening or for starting / expanding micro-enterprise
Insurance Insurance to protect against unforeseen events such as death, health issues, and crop failure
Pension Pension schemes to save specifically for old age and related expenses
FINANCIAL INCLUSION: STATUS
According to the World Bank Global Findex database 2014:
According to the World Bank Global Findex database 2014:
FINANCIAL INCLUSION: WOMEN ARE MOST EXCLUDED
BARRIERS TO USAGE OF FINANCIAL SERVICES
Lack of knowledge about the services
Lack of access to affordable financial services
Low levels of usage and access issues for women
Lack of stable incomes
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