Adverse Shocks and Social Protection in Africa: What Role for Formal and Informal Financial Istitutions?

This paper presents evidence on the wide range of adverse shocks reported by African households. The current financial and economic crisis adds another layer of risk to already vulnerable households and firms.  

The paper examines some informal financial arrangements. Some of these are not designed to smooth consumption when there is an adverse shock. These informal mechanisms have the potential to be the platform to expand access and utilisation of formal finance particularly in rural communities.

Paper prepared for the Conference on “Financial markets, adverse shocks and policy responses in fragile countries”, organised by the European Report of Development in Accra, Ghana, 21-23 May, 2009.

European Report on Development 2009

This publication is an outcome of the work of the ‘Peace, Security and Development Network’ (PSDN), established in 2008. The Network aims to support and encourage the sharing of expertise and cooperation between the different Dutch sectors and organisations involved in fragile states. The PSD Network is an initiative under the Schokland Agreements of 2007.