Health and Microfinance - A Winning Combination for Poor Women and Their Families
Freedom from Hunger brings innovative and sustainable self-help solutions to the fight against poverty.
About You
About You
About Your Organization
Organization Name
Freedom from Hunger
Organization Website
Organization Country
United States, CA, Yolo County
Country where this project is creating social impact
Is your organization a
Non‐profit/NGO/citizen sector organization
How long has your organization been operating?
More than 5 years
Has the organization received awards or honors? Please tell us about them
In 2011, Freedom from Hunger was recognized with the following awards:
• Best Practices in Global Health Award from the Global Health Council for effectively demonstrating the link between health, poverty and development; and
• Member of the Year Award from SEEP for contributing to member learning and dissemination.
In 2010, Freedom from Hunger was the recipient of Best Practices and Innovations Award from InterAction for its work in health and microfinance, recognizing our contribution to effective program approaches and improving practice standards by boosting the efficiency and impacts of field programs.
References - Please provide two references with a two-sentence biography, email address, and phone number for each
Dr. Jaime Aristotle B. Alip is Founder and Managing Director of CARD MRI which was started in 1986 and is a group of mutually reinforcing institutions composed of CARD NGO, CARD Bank, CARD Mutual Benefit Association and CARD MRI Development Institute. Dr. Alip has served in various key positions in the Philippine government and has extensive international experience in the field of microfinance and rural development in Vietnam, Laos, Cambodia, China, Myanmar, Bhutan and East Timor, serving in various capacities as advisor, expert and/or consultant.
Tel (63) 49 562 4309
E-mail: card.mdo@cardbankph.com
Chandra Shekhar Ghosh is Founder and CEO of Bandhan, one of the leading microcredit organizations in India that has received numerous awards and recognition, most notably the Skoch Challenger Award in 2008 and second ranking in Forbe’s Magazines list of the world’s top 50 microfinance organizations. Mr. Ghosh has over 23 years experience in the microcredit sector and has been recognized as a microfinance innovator and mentor with his designation as a Senior Ashoka Fellow.
Tel (91) 33 2334 7602
E-mail: bandhanindia@gmail.com
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Innovation
Select the stage that best applies to your solution
Scaling (the next step will be growing impact on a regional or even global scale)
How long have you been in operation?
Operating for 1‐5 years
The Need: What problem are you trying to solve?
Those working to alleviate poverty—particularly those serving the very poor—are very aware of the significant impact that illness and poor health have on their clients’ ability to move their families out of poverty. Poor families are challenged by the dual circumstances of poverty and poor health, and lack access to health information, appropriate services, and financial tools that help afford needed care. Many poor families struggling to raise themselves out of poverty are driven back into poverty from preventable health events, especially given that they pay a disproportionately high amount of their income on health expenditures and health shocks. Microfinance institutions (MFIs) know this scenario firsthand, and know that it takes more than money to make a difference.
The Solution: What is your solution? Be specific!
While microfinance is an effective development tool for poor families, financial services, in and of themselves, are not enough. Our solution is to integrate microfinance and health to develop practical and coordinated tools that have more power to create lasting improvement in the economic and social welfare of MFI clients and their families. Freedom from Hunger’s Microfinance and Health Protection (MAHP) initiative has successfully demonstrated that these two sectors—when combined—can meet important needs of the poor by delivering cost-effective health interventions at scale by using established MFIs. Through health market research, partner MFIs develop an understanding of client needs, assess local resources and craft health protection packages that are responsive to client need and are practical for the MFIs to provide. Health packages include a combination of health education, health financing and micro-insurance, linkage to healthcare providers and/or access to health products.
The Model: Walk us through a specific example of how your solution makes a difference; include your primary activities
We have demonstrated through pilot initiatives in five countries that MFIs are a viable way of delivering healthcare services to the world’s poor, and that MFIs can add low-cost health services to their financial products with positive client outcomes. For example, the MFI Bandhan is providing its clients in India with health education on preventing common illnesses, prenatal and neonatal care, family planning, care of sick children, referrals for medical care, and planning ahead to face health expenses. This education is accompanied by access to affordable health products such as oral rehydration solution, paracetamol, water disinfectant tablets, oral contraceptives and de-worming medications. Both the education and health products are delivered by health community organizers and village-level volunteers selected and trained by Bandhan. Bandhan also provides health loans for major medical expenses. Our client-level outcomes research showed that after receiving the health protection package, 96% of the treatment group “breastfed baby within one hour of birth” versus 61% of the control group, and 88% of the treatment group “used oral rehydration salts to treat child with diarrhea” versus 60% in the control group. The five MFIs in the pilot were all satisfied with their health-protection products primarily for three reasons:
i. Health-protection products can be inexpensive to provide
ii. Health-protection products can lead to increased competitive advantage
iii. Health-protection products can carry a value for clients that exceeds the MFI’s cost of providing them.
The Marketplace: Who are your peers and competitors? Identify others also working to address the needs you are and what differentiates you from them. What challenges could these players pose to your success or growth?
To further our mission to bring innovative and sustainable self-help solutions to the fight against chronic hunger and poverty, Freedom from Hunger has always operated in a spirit of collaboration. The linking of microfinance and health is an emerging idea and practice that is gaining considerable traction, yet the growth of this innovation hinges on cultivating communities of practice around this intersection by engaging other development practitioners, policymakers, researchers and funders to support its widespread adoption and uptake and create a large demonstration of how to deliver cost-effective health interventions at scale over several organizations in varying contexts.
This Entry is about (Issues)
Social Impact
Founding Story: We want to hear about your "Aha!" moment. Share the story of where and when the founder(s) saw this solution's potential to change the world.
Following two decades of experience in developing and helping MFIs to successfully implement financially self-sustaining Credit with Education programs—which combine traditional village banking with nonformal education on health, business and financial topics—Freedom from Hunger sought to explore whether MFIs could feasibly go beyond health education to offer other types of high-value health services. This initiative was inspired, in part, by Freedom from Hunger’s desire to demonstrate to MFIs that they can fulfill broader social responsibilities while protecting their interests and their portfolio from illness-induced defaults. The other part was demand-driven by our clients, and their need for protection against health-related financial shocks. In 2006, with funding from the Bill & Melinda Gates Foundation, Freedom from Hunger launched its pilot Microfinance and Health Protection (MAHP) initiative in the spirit of exploration and experimentation.
Please describe the goal of your initiative; outline what you are trying to achieve
We are committed to broad-scale uptake, to the dissemination of knowledge, tools and products and to build capacity over the next year to reach over 1.5 million families world-wide with access to integrated microfinance and health-protection services. Specifically, we plan to
1. replicate the microfinance and health-protection model to create a large demonstration of how to disseminate the methodologies, as well as sustain and scale the innovation in varying contexts;
2. continue to innovate health-related products and services;
3. cultivate communities of practice that link health and microfinance practitioners to share lessons learned and best practices, and to collaborate to build regional and local support for expanding the field and reach of health and microfinance.
What has been the impact of your solution to date?
To measure the success and shortcomings of our initiative, outcomes research at client and MFI levels took place from 2007 into 2010. The MFI-level outcomes indicated that health-related products and services could be offered on a cost-effective basis. The average annual net marginal cost to the MFIs in 2009, one to two years after product launch, was US $.29 per client, and the average total cost when MFI overhead costs were included was $1.59 per client per year.
The client-level studies employed a variety of rigorous research methods to examine client-level family health and economic outcomes. On a client level, the research detected statistically significant changes in knowledge and behavior with regard to improved health practices, as well as client and staff satisfaction. We learned that health-protection services carry a value for clients that exceeds the MFI’s cost of providing them, creating net social value and contributing to social mission.
What is your projected impact over the next five years?
We seek to support and encourage the use of the global platform provided by over 3,500 MFIs reaching more than 200 million clients to bring simple, effective and sustainable healthcare interventions to millions of poor families around the world. Our intent is to create a true change in the way that the global community of practitioners, thought leaders, policymakers and funders approach health protection and poverty alleviation. The integration of health and microfinance has the potential to overcome many of the barriers that continue to keep life-saving health interventions out of the reach of those who would benefit the most. MFIs are an under-utilized channel to improve health behaviors, to increase access to health services, and to help break the link between poor health and poverty.
Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Increase awareness of integrated health and microfinance services and reach 100,000 microfinance clients.
Identify three major tasks you will have to complete to reach your six-month milestone
Task 1
Provide training and technical assistance to build capacity of MFIs offering health and microfinance services to their clients.
Task 2
Conduct promotional workshops for MFIs on value, costs and benefits of adding health and microfinance services.
Task 3
Disseminate technical tools and other resources to support broad-scale take-up and adaptation of the innovation.
Now think bigger! Identify your 12-month impact milestone
Create the capacity to reach 1.5 million microfinance clients by Dec. 2012 with microfinance and health activities.
Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1
Continue to support MFIs to replicate, innovate and scale up microfinance and health-protection activities.
Task 2
Disseminate technical resources to raise awareness, support and recognition of health and microfinance services among our peers.
Task 3
Conduct convening, research and activities towards the building of a global community of practice for health and microfinance.
Sustainability
Tell us about your partnerships
To ensure sustainability, our strategy is centered on partnership with in-country, local organizations serving those living on $1.25 a day or less, to which we provide training and technical assistance to implement and deliver our innovations sustainably to their clients. We support their capacity-building as well as provide them with technical expertise in product design and integration, implementation, research, monitoring and evaluation. Freedom from Hunger has a deep history and grounding in leveraging its impact through partnership and is currently working with 150 such partners.
Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?
We are currently growing our activities globally through scale and continuing innovation to create a larger demonstration effect at the same time as building influence among a community of practice. What we learned from the pilot, we are replicating in Latin American, Asian and African countries where we have long-standing relationships with governments and local organizations working with those in poverty.
What type of operating environment and internal organizational factors make your innovation successful?
MFIs not only have compelling business reasons to attend to their clients’ health needs, they are also often uniquely positioned in the communities they serve as trusted intermediaries between community members and the outside world. This innovation is timely and helps MFIs to achieve their social goal to reach more vulnerable clients. We have engaged with poor populations for over 60 years and have used three metrics to monitor whether our programs are successful: 1) Scale—the total number of chronically hungry poor who benefit from our services; 2) Impact—the improvement in food-security status of the clients we reach, changes in health behaviors and access to health care; and 3) Sustainability—the ability of the programs to continue to operate on a self-sustaining basis over time.
Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list
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Comments
Your MAHP initiative is powerful! Linking the MFIs with health education and cost-effective interventions is surely the way to go.
One question (please excuse my ignorance as some of this is new to me):
Are MFIs given to groups of people or exclusively to individuals? If given to individuals, is it possible for them to band together for a common good? What I am getting at is the power of a group to negotiate for what they need at lower prices because they are "buying" healthcare in bulk. Does your project already -- or is it possible to -- leverage group buying power for healthcare needs?
Your thoughts on this are very much appreciated!
Hi Kristen - Thanks for your comment and the good question. MFIs can take lots of different forms. A large number do work with groups, and usually groups of women who meet regularly to discuss each other's loan applications and to make payments and savings deposits. It is with these groups that it is most efficient and powerful to deliver education. And yes, these groups and the collection of groups and clients that any one MFI serves can be a powerful negotiating group for working with providers to improve availability of services, reduce the costs of care, and to also improve quality. There are lots of examples. In the case of one MFI in Bolivia, the women did not want to go to the public health center because they did not feel respected. So the women and the MFI worked together to arrange for them to talk with the health care providers about their concerns and then to go in small groups for services such as pap tests. Another MFI in SE Asia has used the purchasing power of their members to develop a preferred provider arrangement with hundreds of providers who agree to provide services to the MFI members at discounts that range from 10 to 40%. Using MFIs to mobilize women around health can empower them in several different ways...first it improves their knowledge of how to take care of themselves, and also to approach health care providers and systems to get the needs of themselves and their family members met.
Thank you so much, Marcia, for your message! And for your examples of how MFIs have been used to mobilize and empower groups of women to negotiate for their needs as a group. OK, you clearly have depth of knowledge and experience in this area. What do you think or know about adapting this model to the United States? We have a healthcare crisis of our own, and a good idea is a good idea.
We certainly do have a crisis. But I think it is fundamentally of a different nature. Granted though that there are common threads of inequality of access. I think there are some models that have been effective in the past in the US that also use the power of consumers and solidarity groups that have had fundamental changes on the way that care was provided. Organizations like Kaiser Permanente and the Group Health Cooperative had their origins in consumer oriented models, and still maintain greater space for consumer input and control than some others. I am sure that more involvement of groups that could mobilize and empower US health care consumers would be a good thing. The really powerful aspect of the MFI-health link is the ability to sustain interventions like health education, simple linkages to health services and products, so they access to appropriate health services is less vulnerable to the changes in government health financing and policy and donor support.
So by providing more autonomy to recipients, MFIs are improving continuity of education and healthcare -- folks are not as vulnerable to disruptions in care due to outside factors, whether they be of a political, economic, or some other nature. Is that right?
Of course, we know that having a sense of control over one's affairs is associated with better health outcomes, regardless of where one lives, so that aspect of MFIs alone is likely to have a positive impact on recipients' health. Leveraging autonomy for better health is a point of connection with the U.S situation.
For that reason among others, I agree with you that, "more involvement of groups that could mobilize and empower US health care consumer would be a good thing." That's the core idea behind Self-Care Clubs.
One question: How are MFI funds used most often to pay for healthcare? Are they used to pay for services directly, for premiums, or for some other payment structure (like enrollment in special programs)?
Warm regards, Kristin
Most of the MFIs that we work with cross-subsidize health education from their earnings on financial products. That is true for other non-income generating products like health provider linkages. Other products like health loans, health savings, and links to health microinsurance can pay for themselves or even generate a small amount of net revenue. We have been adding to a global data base of MFIs that are providing some type of health program and are finding that on average the MFIs report a net cost (to the MFI) to deliver a range of health products (so this is for different types of packages) of under $2 per client per year. When you consider that the health benefits that at MFI provides to its clients also spill over to other family members, that cost is really about 40 cents per person per year for services that can include health education, greater access to health care providers, and in some cases also the ability to obtain health loans or establish health savings.
Just noticed there may be synergy between your project, the Women's Health Fund one (that builds on the Self-Help Movement in India) and the Self-Care Clubs entry from the U.S. They seem to have a lot in common despite targeting different populations.
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