Exploring community-based financing schemes to finance social protection

Social protection, especially health care systems for the poor, is essential to reduce inequality. Health-related shocks, such as death or severe sickness, can affect households' budgets significantly and create serious household trauma, leading to higher possibilities of them falling into poverty traps. The main challenge of social protection is improving coverage to provide services to people in rural and resource-poor environments. Microfinance health-related services, such as community-based health insurance, are expected to fill the gap. However, this concept also faces many challenges, including sustainability, governance, a lack of data, and a lack of capable human resources to manage it. On the other hand, the fast development of financial technology has raised the development of the crowdfunding platform for medical services. However, this concept only finances the medical expenses of people with a serious disease whom insurance or research for new medicine or treatment do not cover. This paper explores new and innovative ways of financing social protection, especially to improve access to health care services for poor and marginalized communities. Taking advantage of the development of financial technology and looking at how we can address the failures of community-based forms of health insurance, this paper will connect the sustainable financing concept, such as hometown investment trusts (HTITs) and crowdfunding, with community-based forms of health insurance. This paper proposes two models: (1) the two-step HTIT health insurance model; and (2) the integrated HTIT health insurance model.