The Demand for Risk-Managing Financial Services in Low-Income Communities: Evidence from Zambia

This paper forms part of a multi-country project that seeks to understand the risks that low-income entrepreneurs face, their coping strategies, and the potential role that insurance can play in managing those risks. Low-income entrepreneurs are particularly vulnerable to risks. Lacking adequate financial and other assets, the poor are exposed to the smallest economic shocks. The authors systematically analyse the risks to which low-income entrepreneurs in Lusaka are vulnerable and their coping strategies. A comparison of risks and coping strategies is used to identify possible gaps that could be filled by risk-managing financial services, such as savings, emergency loans and insurance. Focus group discussions and participatory rural appraisal (PRA) techniques provide valuable insights into how clients perceive these financial services.