CGAP DIRECT Presentation - Microfinance and HIV/AIDS

This presentation is based on CGAP Donor Brief No. 14, by United Nations Capital Development Fund/Special Unit for Microfinance (UNCDF/SUM). The presentation begins by relating the following figures:

• Over 40 million people worldwide are living with the HIV/AIDS virus;
• 15,000 more people are infected every day.

The presentation addresses the following issues relating to HIV/AIDS:

• What is the effect of the disease on poor households?
  • Poverty deepens;
  • Vulnerability to disease increases;
  • Ability to protect against further economic losses decreases.
• How can financial services best be used in communities fighting with the epidemic?
• How can financial institutions be effective in affected areas?
  • Linkage approach: MFIs can provide basic messages on HIV/AIDS prevention and care; MFIs can refer clients to specialized providers of health and insurance services;
  • Portfolio Diversification: MFIs can operate successfully in communities affected by AIDS by maintaining a diverse portfolio;
  • Risk management: Financial institutions need to develop risk management strategies to prepare for the impact of HIV/AIDS.
• What can donors do to support an effective microfinance response to the crisis?
  • Avoid explicit targeting;
  • Facilitate the exchange and dissemination of lessons learned;
  • Support financial institutions that are focused and specialized;
  • Encourage linkages and strategic alliances.