Shaping National Health Financing Systems: Can Micro-banking Contribute?

Helping the poor meet their healthcare expenses
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This technical brief discusses the scope and potential of microbanking in providing healthcare to poor people.

Domestic resources and Out-of-pocket payments contribute significantly to total health expenditure in low-income countries. Microbanking might help the poor manage financial risk and protect them against financial consequences of seeking healthcare. Microbanking can:

  • Provide affordable access to banking services by linking poor people with the formal banking sector;
  • Be used as an institutional financing mechanism for health;
  • Make health services more accessible by allowing people to either save for future health needs or repay costs slowly over time;
  • Facilitate early case detection through timely financing of outpatient care, thereby reducing costs of inpatient care;
  • Reduce need for poor households to suddenly sell assets or take out loans at very high interest to pay for healthcare.

Microbanking is still evolving, and the actual number of poor people accessing microbanking is not known. Evidence from Bangladesh and Ethiopia, however, indicates that microbanking has improved access to health care services for the poor.