If low income individuals decide to purchase the micro-insurance product, it will certainly moderate the risks and provide the comfort or backing to be more optimistic in whatever they may be doing to pull themselves out of poverty. Micro-insurance is designed to help the low income individual cope with financial emergencies.
However, for the monitoring of financial stability it is not sufficient to look only at banks. You also have to look at other financial intermediaries, insurance companies and pension funds. A very important issue here is to gain more insight into the credit risk transfer from banks to other financial institutions through credit derivatives or the securitisation of loans.