Response Required: Mitigating Risk in African Credit Unions Serving HIV/AIDS-affected Communities

Case study
Date Published: 
Jan 2003
Evans, A. C.

How can Credit Unions mitigate risks posed by prevalence of HIV in Africa?

This paper presents the findings of a research conducted by World Council of Credit Unions (WOCCU) on HIV/AIDS and credit unions in four countries - Kenya, Botswana, South Africa and Zambia. The important objectives of this research were:

  • Examining impact of HIV/AIDS on the financial performance of credit unions;
  • Examining financial demands of members stemming from the incidence of HIV/AIDS;
  • Exploring partnership opportunities with health service providers.

The paper describes the challenges that the credit unions and their members face and discusses the relevance of existing savings, credit and insurance products in the light of the AIDS pandemic. The author calls for donors to support technical assistance for credit unions which can enable them to mitigate risks posed by HIV/AIDS. Finally, she offers the following policy recommendations:

  • Diversifying credit union membership beyond the workplace;
  • Creating loan loss provisions based on analysis of risks;
  • Improving credit administration;
  • Strengthening existing insurance products;
  • Introducing new demand-driven products such as programmed savings for health emergencies;
  • Facilitating linkages between credit unions and health service providers.
Case study