HIV/AIDS & Economic Strengthening via Microfinance

Drawing from the experience of Displaced Children and Orphans Fund (DCOF) projects in Malawi and Zambia, the paper states that HIV/AIDS Increases households' vulnerability to poverty and that a family's ability to cope with the impact of HIV/AIDS depends a great deal on the state of the household's economic resources before, during, and after the disease affects it. It also provides a description of varying degrees of vulnerability, and argues that vulnerability tends to revolve around the illness, death, and productive capacity of primary care giving adults in a household. It says that microfinance programs are one of the few interventions that have shown potential for increasing poor households' incomes in a cost effective manner; and that evaluations of impact at the enterprise level show that, among other things, that access to credit enables businesses to survive crises. Thus the paper concludes that access to credit and savings mitigates HIV/AIDS as it helps:

• Maintain or increase small but steady income flows to poor households;
• Provide opportunities to acquire savings that are secure, easy to liquidate quickly, and still retain their value;
• Reduce vulnerability to loss by increasing coping mechanisms;
• Affected households to avoid irreversible coping strategies that destroy future income earning and productive capacity.