Geneva Health Forum Archive

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Microfinance and Health Intermediation

Presenter: K. Narendar1
Author(s): V. K. Padmavathy2
Affiliation(s): 1Chief Executive, DHAN Foundation, Madurai, India, 2Kalanjiam Community Banking Programme, DHAN Foundation, Madurai, India
Key issues:

Poverty and health issues are mutually correlated. The Millennium Development Goals (MDGs) aim at achieving a dramatic reduction in poverty and a marked improvement in the health status of the poor by 2015. The majority of poor people across the world are not able to afford quality healthcare services. Creating an access to basic healthcare services and providing financial protection against health risks continue to be major development challenges. Over the last two decades, microfinance has emerged as one of the significant mechanisms to address the deep-rooted causes of poverty, inclusive of health. Evidence reveals that access to microfinance services positively enhances nutritional intake, contraceptive usage and reproductive health decisions by women. Microfinance programmes across the globe predominantly focus on women. Their access to savings and credit facilitates reduction of risks and vulnerabilities, and also improves their participation in family decision making. This enables the poor women to increase expenditure on their own well-being and that of their children, which ultimately affects the health outcomes at family level. Microfinance encompasses three major services viz., savings, credit and insurance. Appropriate savings products could be promoted for chronic health problems for which treatment can be planned well in advance. Savings products could also be a solution for addressing preventive healthcare needs such as immunisation, usage of napkins for personal hygiene, etc. Credit services and products could be extended for urgent health needs based on repayment capacity of the members. However, for higher healthcare expenditures social security measures such as health insurance must be in place. Beyond microfinance services, the social capital created out of organising the community can very well be utilised in enhancing the health status of the poor. These community-owned, controlled and managed structures act as a local demand system influencing mainstream healthcare institutions through creating sustainable linkages. Increasing access to healthcare services and behavioural changes related to health and nutrition are the core issues that need to be addressed to sustain the improved health outcomes. This paper highlights the experience of the DHAN Foundation, a professional development organisation working in India in achieving improved health outcomes through microfinance intervention.

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