Integrating Microfinance and Health - Global Microcredit Summit 2011

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In data collected in three countries by Freedom from Hunger, among those households reportinga member being sick in the last 30 days, the average duration of an illness ranged from 6.9 daysin Bénin to 10.8 days in Bolivia (Leatherman et al. in review, 2011). Households with a sickmember in Bénin missed almost four days of work in the prior month; in Bolivia, 26 percent ofthese households missed six days or more of productive work due to illness. Clients’ healthproblems commonly mean potential financial losses for the microfinance provider, which losesefficiency in pursuing sick, late-paying clients or having to replace them with new clients whotake some time to build up to taking larger, more profitable loans. Households often pay the costsof illness by using current income and savings, reducing consumption, borrowing money orselling assets (Russell 2004; McIntyre et al. 2006; Leive and Xu 2008). Borrowing and sellingassets result in additional costs, such as very high interest rates and asset devaluation (e.g.,livestock sold at low prices), sacrificing future income streams (Leive and Xu 2008; Kruk et al.2009). These financing and coping mechanisms may have lasting effects on the ability ofhouseholds to withstand future shocks, creating a cycle of compromised health, economicvulnerability and poverty (Whitehead et al., 2001; Leive and Xu 2008).Microfinance providers take an interest in the health of their clients for both business reasons andbecause they care about their social welfare. The severely limited financing and copingmechanisms may have wide-ranging and long-lasting negative effects on the ability ofhouseholds to withstand future shocks. They may create a cycle of economic vulnerability andpoverty and leave households in debt for a considerable time after the illness has subsided. Whenconfronted with illness-related costs, the chances of a poor household ever moving out ofpoverty diminish. As a result, a growing number of microfinance providers feel compelled toparticipate in finding solutions to the health problems encountered by clients and theirhouseholds.6
The Opportunity for Collective ImpactWhile health and microfinance perspectives are indeed different, they converge in a sharedconcern for the inextricably related economic and health status of microfinance clients, theirfamilies and communities. This convergence creates a common understanding, motivation andopportunity to generate collective impact by assuring that both microfinance and health servicesare simultaneously available and affordable in poor communities.In order to have impact, there are three major barriers to health that must be addressed. All threeof these barriers can be positively modified through health-related programs that can be offeredby microfinance providers: Inadequate health information Insufficient geographically accessible, affordable and effective healthcare services Inadequate financing for healthThere are programs and approaches that have been implemented in various countries that canaddress one or more of these barriers. Ideally, all three barriers would be addressed with acohesive approach for example, health education can produce changes in knowledge andbehavior, but without reliable access to health services and the financial means to pay, healthproblems will remain inadequately addressed. Admittedly, the learning and wisdom derived frompast and current experience is sometimes uneven or hard to access. However, there are nowenough examples and evidence to guide practitioners willing and eager to move in this direction.Global Experience in Integrating Microfinance and HealthRecognizing the vulnerability of their clients to health shocks, a small but growing number ofmicrofinance providers have developed ways to respond to client demand for health protection.Table 1 shows how the three barriers to health can also be viewed as clients’ needs or marketdemand and lists specific examples of interventions that microfinance providers are offering theirclients, often in coordination, even collaboration with healthcare providers.7
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Page 22 and 23: and health micro-insurance. Further
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Page 42 and 43: Rigorous studies conducted in 2008
Page 44 and 45: its clients. The doctors worked at
Page 46 and 47: All programs are currently particip
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