Protecting Health: Thinking Small
This paper discusses the applicability of microfinance as a tool for health protection and promotion in excluded communities.
Following the success of microfinance in providing conventional financing for poor communities, several MFIs have incorporated preventive health education into their services. Studies demonstrate improvements in nutrition, immunization, contraceptive use and other health measures in communities using microfinance. The article points out that despite its benefits, microfinance has been largely inaccessible to the poorest communities who are still dependent on public spending and donor aid. Areas that need further investigation include access to the extremely poor, difficulties in targeting the right form of microfinance to match socioeconomic factors and repayment rates of microcredit for health financing.
The paper recommends that international organizations such as the WHO and World Bank should include microfinance for health in their advice to governments. It suggests a framework for choosing the right financing instruments for different health events:
- Microcredit and microsavings for health-care services that do not cost much;
- Microinsurance to guard against risk as the size of potential loss increases;
- Government relief and aid from international communities for events of extreme uncertainty such as epidemics and natural disasters.