Microfinance and Health Protection Initiative
Davis, United States, April, 23 2008 -
Poor health affects all families, but for those living in poverty it is part of a vicious circle. Chronic illness and disease can result in loss of income and crushing debt that can devastate a family for years.
Microfinance is increasingly recognized as an important contributor to the common goal of ending world poverty. But even the best microfinance programs can be undermined by participants who—because of illness—are late in repaying their loans or default altogether. This is especially true for very poor, rural communities, where people are exposed to more risks and have few options for health care. And it is these same poor, rural communities that Freedom from Hunger is determined to serve.
In response, Freedom from Hunger launched the Microfinance and Health Protection (MAHP) initiative in 2006 to help our local partners create and sustain key health protection services that complement their credit services and help credit clients safeguard their families' health. Made possible through funding by the Bill and Melinda Gates Foundation, this innovative program not only protects the household incomes of poor families (the cost of paying for treatment can be a major setback for very poor families), it also improves their ability to repay loans on time.
Another important benefit is the improved sustainability of the local organization providing microfinance services to very poor communities. Their ability to sustain and grow their operations is directly linked to the health of their clients.
MAHP is an innovation on Freedom from Hunger’s proven Credit with Education program. Credit with Education combines credit and savings services with education on health topics of vital interest to poor communities. Women who participate in Credit with Education programs come together every week or two to borrow money or repay loans. At these same meetings, women participate in learning sessions on topics such as breastfeeding, child health and nutrition, family planning, women’s health and business training.
MAHP takes Credit with Education a step further by adding new services such as:
- health savings plans to help women cover the cost of seeking medical care for their families;
- low-cost health products to support women’s use of proven preventions such as insecticide-treated bednets and water purification systems;
- group rates at approved health clinics and hospitals to encourage women’s use of vital services such as prenatal care, HIV/AIDS testing and family planning;
- micro-insurance that allows women to pay a small, fixed fee in advance of health services they and their families need; and
- health loans to give women immediate financial support when their families face an emergency (eliminating their need for high-interest moneylenders who keep them in debt for months or even years).
Our MAHP partners are trained by Freedom from Hunger to provide these services sustainably and to extend special outreach to rural areas where communities are more vulnerable to illness because of increased exposure and few health care options.
Freedom from Hunger is partnering with five microfinance institutions to develop and test MAHP innovations: Bandhan in India, CARD in the Philippines, CRECER in Bolivia, PADME in Benin and RCPB in Burkina Faso. As MAHP demonstrates impact, Freedom from Hunger will bring the successful services to many more countries and organizations.