Sabina Rogers and Fred Stuart

Two Sides of the Same Coin: How India’s microfinance and health sectors can collaborate for greater impact

It’s clear that health and finance are closely entwined. India, for example, has seen great improvement in the health status of its citizens. Yet, in the past 60 years, its performance on Millenium Development Goals related to hunger and maternal health has been slow. The reason? Health care in India is characterized by poor public infrastructure and human resource management, with a vast disparity in health outcomes between the rich and poor and the powerful and powerless. The poor are also most vulnerable to catastrophic health events, so they need health financing (insurance, savings and loans) to buffer against these risks. They also need education and strategies to prevent illness, since staying healthy so they can attend to their livelihood is paramount.

Microfinance can be a valuable tool for providing the financing that the poor need to maintain their health. And for microfinance to achieve its goal of providing financial security to the poor, it has to address health security. Indeed, the sectors are two sides of the same coin.

That’s why the Microcredit Summit Campaign has worked in collaboration with Freedom from Hunger to establish the Health and Microfinance Alliance, to encourage efforts to harness the strengths of the two sectors to improve health and alleviate poverty. Together, we are supporting the work of 26 financial service providers in India to reach some 750,000 women with health-related programming, and in 2012, we published the “Integrated Health and Microfinance in India” report to further inform and advocate for broader recognition of this important development intervention. On July 30th, we will release the second volume of this report, “Integrated Health and Microfinance in India, Volume II: The Way Forward” at the South Asia Conference on Policies and Practices to Improve Nutrition Security in New Delhi.

As the report lays out, increasing numbers of financial service providers to the poor are tackling health challenges head-on—including microfinance institutions (MFIs) and NGOs that support self-help groups (SHGs), often called self-help promoting institutions (SHPIs). Many are adding health-related products and services to their regular financial services programs—targeting women clients especially—to help their clients build resilience and see a population-wide impact.

Microfinance as a platform for access to health care

MFIs and SHPIs can provide a platform for integrating poverty alleviation approaches and health improvement programs. This promotes awareness of health issues and prompts women and their families to seek out health care preventatively. Integrated programs also increase access to financial services, help smooth consumption, and spur innovation in appropriate products for the most vulnerable. Moreover, MFIs and SHPIs are uniquely positioned in the communities they serve—often the poorest and most vulnerable communities—as trusted intermediaries between community members and health care service providers.

Some are changing knowledge and behaviors known to reduce the incidences of preventable diseases through health education; others are facilitating health savings accounts or health loans. In the data received from 25 self-identified MFIs and SHPIs for this second volume, we found that the predominant intervention was health education. This is consistent with what we found in the information collected from 19 MFIs and SHPIs for the report we published in 2012, which also reported that most of the MFIs surveyed provided health services through health camps, linkages to health providers, and health product distribution. This year’s data indicated a greater emphasis on MFIs actively linking clients to subsidies provided through growing government-run programs, and also the provision of microinsurance to support clients in the event of illness.

Madhuri Gawande, one of the clients profiled in the report, provided an example of how valuable these interventions can be. She participated in health education training offered by Equitas with support from the Microcredit Summit Campaign and Freedom from Hunger. She learned about non-communicable diseases like cancer—how to spot early warning signs and the importance of a yearly medical check-up. According to Gawande, “Because of the health education training, I was able to recognize symptoms of breast cancer in my daughter, Ankita. Because of the health education, I got a check-up from a private hospital, and the good news is that my daughter is healthy because we got her tested in time. I know about this test only because of Equitas, and I am very thankful towards them.”

Gawande’s case illustrates a core benefit of health education—the fact that it benefits not only the person who is being educated, but the family members and others with whom she shares that knowledge. And linking this outreach with financial services amplifies the impact.

Case Studies of combined health and financial services intervention

The report highlights a number of case studies that illustrate how different organizations are leveraging the power of the two sectors. Uplift Mutuals, for instance, has pioneered community-owned and -managed risk-protection systems in India. By associating thousands of low-income families, the group shares their health risks and facilitates access to quality health care at reasonable prices. The scheme has been in operation for 10 years and has 200,000 members.

In another example, ESAF Microfinance has developed, in partnership with the Microcredit Summit Campaign and Freedom from Hunger, health education modules. ESAF delivers health messages to over 10,000 clients in Maharashtra and Madhya Pradesh, which have helped women prioritize their health issues, improve their families’ nutritional status (especially the children), and seek appropriate and timely medical aid.

One ESAF client participated in their water, sanitation, and hygiene (WASH) module, learning the role a toilet (versus defecation in open air) plays in her children having clean water. Rekha convinced her husband and in-laws and took out a sanitation loan to construct a toilet. “It was not easy,” she said. “My family didn’t want to invest in constructing a toilet of our own. Also, space was a constraint. But somehow after attending the sessions on cleanliness and personal hygiene, I decided that for the sake of my two adolescent daughters, I need [our own] small toilet.”

The Way Forward

There are over 93 million microfinance clients and SHG members in India, so cross-sector collaboration will be instrumental in expanding health care access to tens of millions—if not hundreds of millions—of Indians. Furthermore, this intervention is affordable; a global study by Freedom from Hunger with five MFIs found the average cost of integrated health and microfinance programs was USD $1.59 per client per year, and costs have remained consistently low.

It’s evident that this approach holds great potential, but MFIs contemplating adding health programs often must look outward for the funds to pilot these programs. This points toward a need for more outreach and initiative from the health sector. Public health planners endeavoring to expand universal health care in India, and private health providers struggling for patients should take advantage of MFIs’ vast membership base and accrued social capital to promote awareness and generate increased demand for services. Public need for the two sectors’ services is already highly interconnected—closer collaboration could help them take their impact to the next level.

Join the Microcredit Summit Campaign on Sept. 3-5 in Merida, Mexico for its 17th Microcredit Summit, in partnership with Mexico’s Ministry of Economy’s National Microenterprise Financing Program (PRONAFIM). Click here to visit the Summit website. The Summit will feature a workshop on WASH programs, and a full day event right afterward called “Collaborating for Health: Linking and Integrating Health and Financial Services” to look at the measurable impact of integrated programs and to identify concrete opportunities for collaboration to deliver break-through health services. (NextBillion Financial Innovation will be a media partner of the event.)

Sabina Rogers is communications and relationships manager at the Microcredit Summit Campaign. Fred Stuart has been working as a program intern for the MicroCredit Summit Campaign.

Education, Health Care
microfinance, poverty alleviation, research