Mutual Insurance Schemes and Social Protection

Drawing from two relatively successful case studies (SEWA of India and Bwamanda Hospital scheme in the Democratic Republic of the Congo), this paper presents the functioning of mutual insurance schemes and their contribution in providing access to social services for disadvantaged people. The document:

• Examines the main characteristics of mutual insurance schemes, delving into their comparative advantages and limitations compared to formal insurance schemes;
• Evaluates ongoing schemes in the arena of efficiency and capability to reach those who have been excluded from social security services provided by the state or market;
• Looks at the viability of the schemes and isolates the characteristics of successful schemes.

The paper argues that a critical evaluation of existing approaches is necessary in order to formulate policy recommendations, which could help in improving the institutional design. It concludes that despite the weaknesses of mutual insurance schemes in developing countries, which are characterised by the absence of comprehensive social protection for the poor, these informal arrangements are of significant importance to the informal sector.