What can online mutual aid plans do for eradicating or alleviating poverty in China?
The penetration of mobile devices and the ensuing online payment revolution have facilitated people’s everyday life when it comes to transactions, as well as transforming people’s behavior in relation to private insurance. Media press in China (conducted by the government) has long drawn special attention to the importance of the public joining in the social insurance scheme by oppositely reporting examples of hardship suffering experienced by families which are not subscribers to the essential insurance. However, the payment gap still exists despite the expanding coverage, which increased the number of fortunate people seeking commercial insurance grows while leaving poor families unable to afford hefty premiums. The silver lining may be the emerging medical mutual aiding plan. Known as Xianghubao in Chinese, the service is managed by Alipay’s Ant Financial, which requires no premiums from users but financial contribution twice a month, which is often less than a tenth of a yuan. It gains popularity quickly especially among rural citizens who are poorly covered by medical policies, as the theory behind all the calculation is that the more people get involved in the scheme, the less fee each individual would have to donate/pitch in for other participant’s medical expense. For more information, please follow the link to TechNode.