Microfinance and Health

1. Microfinance and Health A Case for Integrated Service Delivery Presented by Chandni G. Ohri Student Researcher

2. 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

3. Outline • Problem • Proposed Solution • Reasoning behind Proposed Solution • Example of the Proposed Solution • Strategies to implement Proposed Solution

4. 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

5. 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?

6. 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 - UNICEF Programs integrating Credit and Social Services1 The development equation: Microcredit + basic social services 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.

7. Outline • Problem • Proposed Solution • Reasoning behind Proposed Solution • Examples of the Proposed Solution • Strategies to implement Proposed Solution

8. Proposed Solution ‘Improving Client and Family Health’ should be an additional goal for MFIs

9. Outline • Issue • Proposed Solution • Reasoning behind Proposed Solution • A successful example of the Proposed Solution • Strategies to implement Proposed Solution

10. The Case for Targeting Health • Comprehensive Solution to Poverty • MFI sustainability and performance • MFIs have unique capabilities to facilitate health services

11. Comprehensive Solution to Poverty • Needs of the target market • Increase in income is insufficient to improve health • Improving health is a complementary strategy

12. 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

13. 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.

14. 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

15. The Case for Targeting Health • Comprehensive Solution to poverty • MFI sustainability and performance • MFIs have unique capabilities to facilitate health services

16. Outline • Issue • Proposed Solution • Reasoning behind Proposed Solution • Example of the Proposed Solution • Strategies to implement Proposed Solution

17. 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.

18. 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.

19. Outline • Issue • Proposed Solution • Reasoning behind Proposed Solution • A successful example of the Proposed Solution • Strategies to implement Proposed Solution

21. Strategies for Integrated Service Delivery2 • Linked Service Delivery • Parallel Service Delivery • Unified Service Delivery 2Dunford, Christopher. “Building better lives: Sustainable integration of microfinance with education in Child Survival, Reproductive Health, and HIV/AIDS Prevention for the Poorest Entrepreneurs.”

22. Next Steps • Providing Health Services is not enough • MFIs need to modify their targeting tools, incentive systems, and impact monitoring

23. 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

24. Questions