Microfinance Plus: BISWA, Bednets and More

1. Microfinance Plus:BISWA, Bednets and More

2. What is the plus? • Not actually entirely clear ??????????? • 1) Any add on service or product that is not simply the provision of financial product • 2) Any add on service or product added not having to do with finance • Probably not important, but I feel that sometimes when people refer to MF Plus they disclude business training and financial education

3. Why the Plus? • Again two answers… • 1) From the perspective of MF providers they often feel that there financial services are inadequate to bring people out of poverty (which is often their stated goal). They feel that without supplements to finance they cannot better the lives of their clients as much as they would like • 2) From the perspective of NGOs that are not MF providers they may see microfinance as a possible distribution channel for other services. For example, some AIDS education NGO might think “ a bunch of poor people are getting together for meetings in order to access financial services, why don’t we use these meetings for some dispensing information about AIDS?”

4. What are Some Possible MF Plus Products? • Education Programs: • Financial literacy, Business Training, Health Education, Women’s Empowerment, Political Awareness in Order to Access Government Services • Market Linkage: • Helping clients gain acccess to markets in which they could sell their product, agricultural and otherwise for a higher price than they are currently receiving. • Product Sales: • Selling cell phones, water purifiers, solar powered flashlights (all done by SKS) and maybe even BEDNETS!!!!!!!!!!!!!

5. Leading us to…. Microfinance and Malaria • MFIs often serve poor rural people. Malaria kills poor rural people. • Perhaps MFIs could be used to help control malaria. • MFIs could be a good conduit for distributing nets freely, or maybe they could even sell them!

6. What is the issue we are trying to understand? • The use of insecticide treated nets (ITNs) is advocated by several international bodies, and studies have shown they significantly reduce malaria morbidity and mortality. • Yet adoption rates remain low in many malaria endemic areas. • If ITNs are cheap and effective, why don’t more people have and use them?

7. Reasons People Don’t Have ITNs • Transporting nets to isolated villages with poor roads is expensive and time consuming. • Government expenditure on malaria control remains low • Social acceptance and awareness of the benefits of ITNs in some endemic areas remains low. • Purchasing a high quality net may represent a large portion of monthly income.

8. What Could Lead to Higher ITN Coverage? • Greater dedication of government and NGOs • Subsidizing the cost of nets. • Allowing nets to be purchased on credit

9. Researching the Impact of Selling ITNs through Microcredit • The research began in May of 2007 with the intention to understand the impact of selling ITNs through micro-credit compared to other delivery mechanisms. • The researchers chose to evaluate this impact through the process of a randomized evaluation (explained later).

10. What do we want to learn? (part 1) • What is the impact of selling ITNs through micro-credit contracts? How many lives are saved? • Is selling ITNs through MFIs logistically feasible? • What is the impact compared to giving nets away for free? • How does ITN provision affect not only health but also economic activity and child schooling?

11. What do we want to learn? (part 2) • The research also includes an element of behavioral analysis • Why do people choose to purchase ITNs? • What type of people are more likely to actually use their ITN? • Who in the household is sleeping under the ITN?

12. Research Design (part 1) • 150 villages across 5 districts of Orissa in which BISWA has operations were chosen for the study. • An extensive baseline survey was given to 10-15 BISWA self help group (SHG) members in each of the 150 villages. • The members were surveyed for basic health and economic indicators and rapid diagnostic tests were administered for malaria, LF and anemia. • This survey was completed in May of 2007.

14. Research Design (Part 2) • The 150 villages were randomly divided into three groups of 50 in which BISWA SHG members would be offered differing interventions. • Members of group 1 were given an hour long information campaign on the causes and effects of malaria and the use of ITNs as a preventative measure (no nets were sold or delivered for free to this group). • Members of group 2 were given the same information campaign and enough free nets to cover all or most members of the household. • Members of group 3 were exposed to this same information campaign and offered the opportunity to purchase ITNs from BISWA through micro-credit contracts or in cash.

15. Study Design

17. The Intervention • The intervention was executed from September to November of 2007. We went back and tried to sell them again. • 4,078 nets delivered for free and 1,128 nets sold on micro-credit or in cash. 50% of households offered the opportunity to purchase nets bought at least one

25. The Follow Up • In the follow up we attempted to survey all of the 1850 baseline HHs and encountered only 3% attrition. • We also interviewed an additional 10 households using the BPL census in baseline villages to examine spillover. This is also cool because it is similar to a random sample • We also conducted 15 interviews in 25 additional villages.

26. And Our Results…. • The number of people sleeping under nets did greatly increase in our treatment villages (particularly those sleeping under treated nets, but sadly our malaria and anemia data have not shown health improvement for those in treatment villages. • This is astonishing considering the large numbers of studies that have shown free nets are very effective in reducing malaria • Is there something wrong with our data? We don’t think so.

27. Surprise # 1 • BISWA does not really collect monthly installments. They are actually quite flexible, and loan officers do not even go to the villages monthly • They won’t acknowledge this because it goes against MF dogma. We designed the product for monthly repayment, but that is not what we are actually testing. Really deferred payment that can be done over one year.

28. Surprise # 2 (which is not so surprising) • Surprise # 2 (which is not so surprising)Loan Officers were trained to run the information campaign and sell the nets, but in the end our staff ran the program • Our staff does everything except repayment collection (and in some cases the loan officers are not even doing that)So for whatever reason (lack of incentives, lack of ability, bad training, lack of motivation), we found that taking on another product was too much for the loan officers

29. BISWA’s Interest • Was upper level BISWA staff really interested/excited about the project? • Issues of management bandwidth and short term attention • Was there any reason they badly wanted the project to succeed? • Was Mid level management really jazzed about implementing the project? • How about lower level management?

30. Research Limitations • Due to time and financial constraints, the follow up survey will be conducted after one year, so more long-term outcomes will not be tested. • We were only able to study the behavior across five districts, so it is difficult to know whether results would have been different if we conducted our study in Kalahandi and Sonepur.

31. My Thoughts on Microfinance Plus • Management must truly believe that the product has an opportunity to be sustainable and not add a ton of work for their staff…. Or • Organizations that want to use microfinance distributional channels should not try to use the existing infrastructure of the MFI, but rather take advantage of the trust and relationships that MFIs have built up in communities. MFIs are like other businesses in which expansion of products and facilities generally only makes sense if there is slack human resources or a clear opportunity