Microfinance and Households Coping With HIV/AIDS in Zimbabwe: An Exploratory Study

This paper presents the details of a study conducted in Zimbabwe about the relationship between a microfinance program, Zambuko Trust, and the ability of the micro-entrepreneurs' households to cope with the impact of HIV/AIDS.

The study also examines:

• The effect of HIV/AIDS on Zanbuko's operations;
• The methods that microfinance institutions (MFIs) can adopt to lessen the impact of HIV/AIDS on their clients and operations.

The paper describes the methodology of the study that includes:

• Survey of 338 Zambuko clients and 241 matched non-client entrepreneurs;
• Use of proxy indicators to classify the survey respondent households as HIV-affected or non-affected.

The paper lists the following key findings of the study:

• HIV/AIDS adversely affects the financial status of micro-entrepreneurs' households;
• Participation in a microfinance program can lead to income-smoothing and better financial management;
• MFIs need to respond to client needs by including training, new loan products and networking.

The study concluded that:

• MFIs can help clients and their families respond to the impact of HIV/AIDS;
• There are several advantages associated with access to credit and business management training.

The paper makes the following recommendations to MFIs, donors, governments and AIDS service organizations:

• Develop and test tools that would permit MFIs to better estimate HIV/AIDS affectedness among their clients and target groups;
• Change the legal framework for non-banking microcredit organizations, so that they can collect voluntary deposits;
• Train loan officers in counselling skills and existing support services.