Developing Micro-Insurance to Expand the Scope of Social Security for the Informal Economy in Vietnam

Abstract

Social security is considered a fundamental means to reduce poverty, eliminate social exclusion and promote social cohesion, but the majority of workers in the informal economy are still deprived of the right to social security. Many studies show that microinsurance programs have a strong potential to reach actors in the informal economy and mobilize additional resources for social protection; microinsurance is effective in reducing vulnerability to risks, enhancing the ability to protect participants, and contributing to reducing income poverty as well as reducing multidimensional poverty. Developing micro-insurance contributes to social security, hunger eradication, poverty reduction, and promoting financial inclusion. The article used data collection methods, methods of analysis, synthesis, comparison, and contrast from secondary data sources, clarifying the theoretical basis for micro-insurance development to expand the scope of social security for the informal economy, international experience and the current status of micro-insurance implementation in Vietnam. The article also offers some recommendations/policy suggestions to develop microinsurance in Vietnam shortly.