Friday, September 16, 2011

NFS Series: Health Care Services Part 2: Health Care & Microfinance

Part 2 of Health Care services is written by Chris Dunford from Freedom from Hunger. He will be discussing Health Care Services and how they relate to microfinance and our borrowers. For more on Chris and Freedom from Hunger click on Part 1 of our series: General Health Care Services.

Integrating Microfinance and Health Services

Access to financial services is undeniably important to all families, but it is insufficient on its own to address the multi-dimensional challenges of poverty. Ill health and the inability to access health care are key factors both leading to and resulting from poverty. Microfinance clients and staff frequently report that the cost of illness causes difficulties with loan repayment and savings deposits, often requiring clients to use their business loans and other household assets to pay for health care expenses. Clients report low usage of health services and delays in seeking care, stemming from barriers of cost, geographic access, cultural beliefs and lack of trust in health providers. Inadequate information about how to prevent and treat illness is a common and pressing concern.

Freedom from Hunger was commissioned to write a paper for the Global Microcredit Summit (in Valladolid, Spain, November 14-17, 2011) on “Integrating Microfinance and Health: Benefits, Challenges and Reflections for Moving Forward” to share the evidence to date that indicates that integrating microfinance with health protection services actually works and is “workable” for microfinance providers. To view this paper and the many underlying papers on MFI experiences and research results, please visit:

There are three major barriers to health that must be addressed and a growing variety of MFI responses that have been shown to be cost-effective for clients and either affordable or profitable for the MFI:

Problem: Inadequate health information
  • Solution: MFI provides or links its clients to quality health education and promotion (using non-formal adult education techniques).

Problem: Insufficient local availability of effective health services
  • Solution: MFI links its clients to local health care and medication providers through a “preferred provider program” (referral of clients to quality care and medication providers contracted locally to receive and treat the referred clients with a major discount on standard fees or prices);
  • Solution: MFI coordinates local health providers (public or private) and MFI clients to offer mobile health clinics in client communities;
  • Solution: MFI trains and supports community health workers to provide communal and/or door-to-door education, referrals to clinical services and follow-up visits to ensure proper medication;
  • Solution: MFI provides loans to help establish or upgrade local clinics, pharmacies or health enterprises (e.g., sellers of health care products, like mosquito nets, oral re-hydration salts and over-the-counter medications).

Inadequate financing to pay for health services
  • Solution: MFI provides savings accounts and/or emergency loans specifically to cover health-related costs;
  • Solution: MFI offers prepaid health care or insurance plans;
  • Solution: MFI becomes an agent for a government or private hospitalization insurance plan.

We identified 89 organizations world-wide that provide both microfinance and health interventions (through a voluntary online survey in 2009 and supplemented in 2011 with information from secondary sources: personal contacts, news reports, articles from sector publications, etc.). They are well-dispersed geographically: 37 percent in Asia, 26 percent in Sub-Saharan Africa and 29 percent in Latin America and the Caribbean (8 percent other). Health education is the most commonly offered type of health intervention (80% of the 89 organizations) with all other types offered by less than one-quarter of the organizations. Kiva works with many field partners offering health-related services. You can read more about Kiva Field Partners on our website and learn about how Pro Mujer in Bolivia has helped over 7000 children receive their required vaccinations.

Coming up in Part 3 of Health Care services we have inside access to a field partner in Ecuador who offers a wide array of health related services.

here to make a loan to an entrepreneur in the Health sector at

For quick links to each part of the series click on Introducing Kiva's Nonfinancial Services Blog Series