Healthy Microfinance: Innovations in Microfinance and Health Services
Healthy Microfinance: Innovations in Microfinance and Health Services
Freedom from Hunger Freedom from Hunger and its work with Indian MFI Bandhan Microfinance has become widely recognized for its effectiveness in putting money and opportunity directly into the hands of those who need it most— women living in poverty. Microfinance institutions, often called “M.F.I.s,” are now faced with the challenge of achieving massive scale to reach the more than 2 billion people who live on two dollars a day or less and who are largely neglected by the formal banking sector. But the potential of microfinance to help the poor overcome poverty, and the ability of MFIs to achieve massive scale, are threatened by health problems commonly suffered by MFI clients and their families. Illness is cited as the most common reason that MFI clients become delinquent. Ill-health can also prevent MFI clients from expanding or even sustaining their enterprises. Similarly, microfinance institutions suffer as borrowers divert business profits to pay for health care, take time away from their microbusinesses to care for sick family members, fall behind on payments, or drop out altogether. Bandhan Microfinance Beneficiary I have taken Microbusiness loan from Bandhan. Now they have started with health loan. My husband had a surgery. I have taken loan for his treatment. We used to take loan on high interest from moneylenders. Here we get loan on very low-interest rate. This is very useful for us. Determined to address these problems and help microfinance clients and institutions achieve their potential, Freedom from Hunger launched its Microfinance and Health Protection Initiative in 2006 with funding from the Bill and Melinda Gates Foundation. A pioneer in integrating nonfinancial services with sustainable microfinance services, Freedom from Hunger collaborated with MFI partners in Benin, Bolivia, Burkina Faso, India, and the Philippines. Myka Reinsch directs the Microfinance and Health Protection Initiative at Freedom from Hunger. Freedom from Hunger identified five strong MFIs that were already sucessfully reaching very poor people. The MFIs had observed, though, that in those rare instances when people couldn’t repay their loans, the reasons were often related to health. These MFIs are genuinely concerned, not only about the health of their clients, but also about their own institutional bottom line. Freedom from Hunger and our partners had already proven that integrating simple health conversations into repayment meetings could improve family health. but it was clear that microfinance clients needed more: better access to health care, better access to health products, and a way to finance major health expenses. Freedom from Hunger collaborated with five MFIs to develop health-related services that responded directly to client needs and could be delivered on a practical and sustainable basis. In North Eastern India, Freedom from Hunger partner, Bandhan, is a fast growing, effective microfinance organization serving some of India’s poorest communities. Founded in 2002, Bandhan serves more than a million clients, most of whom live on less than 85 dollars per month. Bandhan’s average loan is about 80 US dollars, and all of Bandhan’s clients are women. Facing the same challenges as millions of other microfinance clients, Bandhan’s clients said they needed help preventing illness in their families. Women also said it was hard to get medical care when they fell sick with routine problems such as diarrhea, or chronic diseases such as high blood pressure and diabetes. When they could get care, they needed help paying for doctors visits and medicine. Injuries and serious illness such as cholera, complications from childbirth, and HIV, could wipe out a family’s finances and trap them in debt. Freedom from Hunger’s Regional Microfinance and Health Protection Manager for Asia, Doctor Shomeetro Dotto, worked with Bandhan to develop and adapt a package of integrated and cohesive health protection services that directly respond to these challenges. Mister Chandra Shekar Ghosh, Bandhan’s founder and chief executive officer, recognized the importance of health protection services to complement microfinance services. Bandhan is a micro-credit organization. We have started microcredit end of 2002. But after the four years, closing of the 2006, we have been started, microfinancing and health protection initiative. So, we seen that after the three years operation of microfinance, the poor people have need in the health support for their total development of the family. To determine which services would work best and which features were most needed and desired by clients, Freedom from Hunger and Bandhan conducted extensive market research. The data collected refined Bandhan’s understanding of client needs and directed the choice of which health protection products— both financial and non-financial— would be integrated into its ongoing microfinance services. Bandhan selected a package of services that included loans to cover major medical costs, health education on maternal and child health, and planning ahead to face health expenses, and improved access to health products and health care. I have taken loan from Bandhan. This is the third year running. This is my third year in business. I’m doing very well, but I had to take the health loan for my child’s illness. I’m doing business, bamboo baskets, winnowing fans, and other bamboo products. I would have had to take loan from outside. If I shut down my business, I shall not be able to repay. I have a family to run, so I did not touch the money invested in business. I have taken health loan to see to my child’s treatment. In the first year of the program, Bandhan made more than 350 health loans that averaged about 80 US dollars each. The interest rate on the health loans is somewhat lower than Bandhan’s usual interest rate, and clients have up to one year for repayment. So far, all of the health loans have been repaid on schedule. Bandhan’s clients use the cash to gain access to needed medical treatment without turning to moneylenders or resorting to selling their income-producing assets. Like Bandhan, Freedom from Hunger’s other partners in the Health Protection Initiative are experiencing success with offering health loans. Our partners in Bolivia and Burkina Faso have also demonstrated the value of health loans in providing members with access to needed care and important sense of financial security that their hard won gains from their microfinance businesses do not have to be lost in the event of illness or accident. The other way to protect resources is, of course, to prevent illness. and that’s why Bandhan and our other partners provide health education. Bandhan has trained health community organisers to provide education on preventing common illness with a focus on maternal and infant health. This education takes the form of simple learning conversations— an innovation developed by Freedom from Hunger. Recognizing that clients may not be able to read or write, each learning conversation introduces health information through story, visual aids, and dialogue. We have learnt from health forum that children below 6 months of age should have only breast milk. Bandhan’s clients, their friends, and their families are all invited to attend these hour long-sessions held in their communities each month. With behavior change as the goal, Bandhan reinforces health messages shared during the community learning conversations with one-on-one visits from community volunteers called sastho sohayikas –
or “SS.” Recruited directly from Bandhan’s credit groups, each SS offers her time on a volunteer basis, but is given a chance to earn money by selling essential health products, such as oral rehydration salts, paracetamol, sanitary napkins, pregnancy tests, anti-worm tablets and other health protection products. The SS also help women understand when to seek treatment and what to expect when visiting their local health center. Sritikana is a one of over 120 SS’s trained in the first year of the program. I work as a sastho sohayika and visit several families every day to listen to their health concerns, answer questions, and provide health advice. If there is a pregnant woman, I encourage her to visit the health clinic for prenatal care. And if there’s a child, I advise the mother to get the child’s vaccinations, and also about breast feeding. When there is a serious illness, I refer the sick family member to the hospital and when needed, I also have some medicines to give them. Freedom from Hunger’s goal is not only to assist Bandhan and our other partners to expand these services, but also to bring the most successful practices to other MFIs around the world. Our goal is to provide practical and sustainable solutions so that microfinance clients can achieve their potential. With the right knowledge and tools to protect themselves and their families from illness and related financial shocks, that’s possible. Freedom from Hunger is committed to sharing its findings about the integrated solutions to the health and poverty challenges faced by microfinance clients and the institutions that serve them. for more information, please contact Freedom from Hunger.