MILK Brief #5: Changing Role of Family Networks in Coping with Risk

Poor households use a variety of tools to cope with risk, including formal and informal savings, loans, risk-sharing, asset sales, and cash and in-kind transfers from family members, communities, governments, and NGOs. Traditionally, informal social networks at the family level have played a particularly significant role in helping the poor cope with risk. This brief examines the importance of family networks and ways in which recent demographic trends indicate a weakening of these networks and emergence of new gaps in risk-coping ability which formal insurance products may be able to fill.