Working Paper on Microfinance and Health, A Case for Integrated Service Delivery
This paper highlights the necessity of incorporating health as an important goal for microfinance institutions (MFIs), since poverty and poor health are closely related. The author states that while focus on health may appear to adversely affect financial sustainability of MFIs, in reality, it can help the cause of sustainability. The author identifies the ill effects of poor health on microfinance operations:
- Delay in loan repayment;
- Inability to repay loans, resulting in default;
- Poor attendance at MFI group meetings;
- Decrease in client business performance, due to neglect and redirection of capital;
- Undermining of MFI client group solidarity.
The author argues that MFIs have unique capabilities to facilitate health services, and thus they provide a more comprehensive solution to poverty. She identifies the following strategies for providing combined health and financial services for the poor:
- Linked service delivery by two or more independent organizations operating in the same area;
- Parallel service delivery by two or more programs of the same organization operating in the same area;
- Unified service delivery by one organization, one program, and one set of staff members.
Finally, the author concludes that poverty alleviation is successful only when all basic needs of poor are fulfilled, and microfinance and health mixed together provide a stronger option than that provided by either separately.
