Microfinance Horizon

Author: Somen Saha (Senior Lecturer, Indian Institute of Public Health Gandhinagar)

Abstract:

Microfinance has proved to be an effective and powerful tool for poverty reduction. There is a greater reduction in poverty when microfinance programs are combined with increased access to basic social services, including health, than when the programs focus on credit alone. Studies have shown that illness and related expenditures are the leading cause for micro-business failures and loan default. This paper is an attempt to understand the health programs offered by MFIs in India, and build the case for wider integration of health into microfinance programs.

A review of MFIs listed in the MIX Market database was done, followed by a search of individual MFI websites. One in every four MFIs in India offers some form of health services. These programs vary widely from small scale health awareness programs to complex health interventions. Health education is the most common health intervention by

MFIs (58%), followed by health camps (24%), and health insurance (24%). 12% MFIs offer health loans in addition to the regular business loan. 38% of MFI-health programs attempts to address composite health needs of their clients. 11% of the MFIs addresses the issue of community hygiene and sanitation and nutrition, followed by awareness and control of HIV/AIDS, mother and child health, and immunization program (8%). Often MFIs struggle to design appropriate community sensitive health programs which can result in failures. Also the lack of evidence sharing in the sector, calls for more systematic efforts to strengthen evaluation and applied research.

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