Microfinance and Health. Lecture # 16 Week 10. Structure of this class. Importance of insurance & credit access for poor households Health needs are not met in rural India Attempts to evaluate effectiveness of microfinance in administering heath insurance ( SKS case in India)
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Lecture # 16
Absence of health insurance or credit may
“Illnesses pushes households into poverty, through low wages, high spending for catastrophic illnesses, and repeated treatment for other illnesses”
Questions: microfinance effective at administering health insurance? Will SKS clients remain? Will this method mitigate adverse selection?
Reasons for integrating health in microfinance:
“Microfinance practitioners are often motivated to provide non-financial services to their clients, because they recognize the need and hear the demand. However, the legitimate concern for sustainability, interpreted as the financial viability of the microfinance service as a business, has made practitioners very cautious about non-financial add-ons. They believe that add-ons can only be a drag on the drive for sustainability” ….Christopher Dunford (2002)
Double bottom line: reaching the poorest while attaining self-sufficiency
Assuming social objectives first (narrowly defined: poverty alleviation via the provision of health, the second challenge is to identify affordable and sustainable strategies
“ Increased monthly non-farm earnings & increase antibody-rich milk, colostrum, and breastfed their babies longer”
“increased learning on how to prepare a thicker porridge and when to begin feeding it to their young children”
Compartamos is self-sufficient but administrative costs are twice as high as those charged by “integrated” and self-sufficient MFIs such as Pro Mujer and Crecer.
Next class: Microfinance and Education