Microfinance and Health

A Case for Integrated Service Delivery

Presented by

Chandni G. Ohri

Student Researcher

Acknowledgements

Faculty at the University of Washington, Seattle specifically Prof. Sivramakrishnan, Prof. Daniel Chirot and Prof. Leigh Anderson

Researchers and practitioners whose work I have built on

Drew Tulchin, of Social Enterprise Associates, who acted as a guide and motivator

Grameen Foundation USA for providing me an opportunity to work in this field

Outline

Problem Proposed Solution Reasoning behind Proposed Solution Example of the Proposed Solution Strategies to implement Proposed Solution

Problem

More than a billion people live in absolute poverty Poverty is a multidimensional problem

Deprivations include lack of money, lack of food, housing, clothing, education and healthcare.

Need for multidimensional solution to problems of poverty

1 The Human Development Report 2003

Microfinance is a powerful strategy for poverty alleviation

BUT

Microfinance, by itself, is not a ‘multidimensional solution’ to problems of poverty

THEREFORE

What more can MFIs do so that they are better able to fulfill the ultimate goal of poverty alleviation?

UNICEF Programs integrating Credit and Social Services1

Health Indicator In Areas with both credit and social services

In Areas with only credit services

In Areas with neither services

Infant mortality rates  

113/1000 live births

116/1000 live births

135/1000 live births

Diarrhoea related children deaths

37% less than average

33% less than average

Average

Immunization coverage

83% 71% 61%

Percentage of households using tap water

From 9% to 36% - four times

From 19% to 38% - two times

-

1‘Microcredit: Lessons learned from UNICEF experiences and principles for support’, by Ashok Nigam with Mohammad Mohiuddin, Division of Evaluation, Policy and Planning, UNICEF New York.

The development equation: Microcredit + basic social services

Outline

Problem Proposed Solution Reasoning behind Proposed Solution Examples of the Proposed Solution Strategies to implement Proposed Solution

Proposed Solution

‘Improving Client and Family Health’ should be an additional goal for MFIs

Outline

Issue Proposed Solution Reasoning behind Proposed Solution A successful example of the Proposed

Solution Strategies to implement Proposed Solution

The Case for Targeting Health

Comprehensive Solution to Poverty MFI sustainability and performance MFIs have unique capabilities to facilitate

health services

Comprehensive Solution to Poverty

Needs of the target market

Increase in income is insufficient to improve health

Improving health is a complementary strategy

MFI sustainability and performance

Client/Family ill-health can lead to Delayed loan repayment Inability to repay loans, resulting in default Poor attendance at MFI group meetings Decrease in client business performance, due to

neglect and redirection of capital Undermining MFI client group solidarity

MFI sustainability and performance

MFIs and HIV/AIDS Over 40 million people are currently affected by the

disease. 15,000 new infections and 95% of those are in developing countries.

Significant overlap between the target population for microfinance and populations affected by the disease

In countries with high incidence of HIV/AIDS, approaching 30% in parts of Africa, MFIs are struggling to operate successfully.

MFIs have unique capabilities to facilitate health services

Effective outreach through MFI channels Group-based delivery systems, branch locations

in poor areas, loan officer-client relationships, and home site visits

Increased income (through MF) and access to health education/services are complementary

The Case for Targeting Health

Comprehensive Solution to poverty

MFI sustainability and performance

MFIs have unique capabilities to facilitate health services

Outline

Issue Proposed Solution Reasoning behind Proposed Solution Example of the Proposed Solution Strategies to implement Proposed Solution

Credit With Education

One of the most successful programs incorporating health education with credit services.

The field officer also conducts the health education sessions as part of regular group meeting, the costs of the added service are low.

Credit With Education

Controlled, multi-year research studies have documented:

Incorporating additional services like health education does NOT diminish credit service impact.

Significant improvements in children’s nutritional status and intake of calories for Credit for Education program clients.

MFIs providing integrated services have also been able to achieve operational self-sufficiency.

Outline

Issue Proposed Solution Reasoning behind Proposed Solution A successful example of the Proposed

Solution Strategies to implement Proposed Solution

Strategies for Integrated Service Delivery2

Linked Service Delivery

Parallel Service Delivery

Unified Service Delivery

2 Dunford, Christopher. “Building better lives: Sustainable integration of microfinance with education in Child Survival, Reproductive Health, and HIV/AIDS Prevention for the Poorest Entrepreneurs.”

Next Steps

Providing Health Services is not enough

MFIs need to modify their targeting tools, incentive systems, and impact monitoring

Conclusion

Poverty is a multidimensional problem requiring a comprehensive approach

Microfinance is an important poverty alleviation tool – though improved income is a partial solution

MFIs need to target other ‘basic needs’ of the poor, like health.

MFIs can choose one or more of the multiple strategies to provide integrated credit and health services

Questions