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How Do the Poor Pay for Unexpected expenses?

How do the poor in developing countries manage to pay for unexpected expenses for medical costs and loss of income due to the bread winner°«s death?

In many developing countries, there is no well-developed social security system that people can depend upon when they get sick, lose their job, etc. So, when the poor get sick or have an accident and get hurt, and they lose their income, first they go to their relatives, friends, and neighbors in the community to borrow money.

However, these people are poor as well and they cannot necessarily afford to lend a hand to help others. When families and friends are not available, people are left with little choice other than turning to money lenders in the community because many of the poor do not or cannot have bank accounts at formal financial institutions.

The poor are not able to submit the necessary documentation to open bank accounts (many of them are working in informal sectors and no formal documentation is available) and as their account size is small, the banks tend to give the cold shoulder to these people. The money lenders in the community are easily accessible to the poor, yet the interest rates they charge on lending in many cases are prohibitive and much higher than are in banks.