مقاله انگلیسی رایگان در مورد تصمیمات مالی و مدیریت ریسک خانوارهای کم درآمد در مناطق حادثه خیز – الزویر 2020

1- Introduction

2- Methods

3- Results

4- Discussion

5- Conclusions and ways forward

References

Abstract

Designing optimal financial products for rural households in poor countries remains a challenge, especially in a risk management perspective in disaster-prone areas. In addition to financial intermediaries’ difficulties with reaching potential customers efficiently, information asymmetries prevent fully understanding customers and developing suitable products for them. The clientele’s weak information systems, coupled with cultural aspects often unfamiliar to the supplier of financial services, make the analysis difficult and costly. This article builds on a financial statement approach to empirically explore the combination of farmers’ financial and non-financial strategies, in a portfolio risk management perspective, with a focus on shock-type risk exposure. It emerges that farmers’ decisions follow a sequential process with different combinations of savings, credit, and insurance that interact with non-financial strategies to help managing risks. The study relies on panel data collected in Ethiopia. The empirical analysis confirms the vulnerability of sample households to natural systemic shocks and entails that the conclusions of this paper can be considered part of the broad literature on the disaster risk management of low-income households.

CONCLUSIONS AND WAYS FORWARD

This article was inspired by the use of a conceptual framework based on a portfolio approach to study rural households’ risk management strategies and had a particular interest in the potential demand for insurance. The structure of the sample shows that, while several risks are affecting the households, a large percentage of the interviewees declared to suffer of disastertype events: droughts and floods. The outcome of the current analysis confirms the results of previous, simplified, attempts to prove that although insurance is often considered an alternative measure to farmers’ own riskcoping strategies, it may be a complementary solution. The information obtained by using a system analysis (in this case, the SURE methodology) is that the main dimensions of a portfolio approach to risk management can be analysed in their reciprocal relationships. Based on the findings, insurance and savings decisions are affected by the overall composition of risk management strategies (savings, insurance, loans, livestock), and borrowing decisions depend on all factors but savings. Another finding is that the direction of the influence in some cases is constant (always positive, suggesting complementarity), and in other cases, the direction changes according to the sequence of the portfolio choice. This phenomenon is evident in the case of borrowing.