Healthier clients make better clients. Illness is often a primary reason of delayed loan repayments among microcredit borrowers. To mitigate against this risk and improve the health and well-being of their clients, a number of microfinance institutions (MFIs) have begun layering health services on top of their financial products. Approximately 50-60 participants, representing MFIs, nongovernmental organizations (NGOs), and academia, recently participated in the 1st National Meeting of the Health and Microfinance Community of Practice in Lima, Peru. Hosted by Freedom from Hunger, in partnership with Promuc, the meeting centered on forming a Community of Practice (CoP) to develop, promote, and facilitate the integration of microfinance and health programs within the country.
First and foremost, the forum allowed organizations already active in the health and microfinance space to share their experiences integrating these two separate but very complementary services. These ranged from offering health education to MFI clients and selling low-cost health microinsurance, to operating full-service primary care centers. As example of the latter is Pro Mujer Peru, an organization dedicated to providing disadvantaged women with vital financial, health, and human development services. Pro Mujer runs health units conveniently co-located in the centers where individuals come to repay their loans. This offers clients an easy way to obtain care from an organization they already know and trust. In addition to curative care, Pro Mujer offers health education during scheduled repayment meetings.
Another MFI, PRISMA Microfinance, used microloans as a financial incentive to help battle tuberculosis. Noticing high rates of TB among their clients, PRISMA offered microcredit as a "carrot" for completing the full course of their TB treatment (i.e., clients would receive a loan disbursement only when tests showed that they were completely cured of TB). Although the program was a small pilot implemented in one site, preliminary results have shown significant increases in TB cure rates. PRISMA has also used education to reduce the stigma associated with TB and empower their clients to seek treatment.
Other organizations such as the Adventist Development and Relief Agency (ADRA)—as well as Pro Mujer Peru—have begun offering health microinsurance products to their clients.
Following presentations of current work, participants explored several paths forward for a health and microfinance CoP. These included:
Documenting Best Practices: There are several notable examples of MFIs that have successfully layered health care on top of their financial services. Others, however, struggle to develop workable models. Participants suggested that the CoP could play a role in documenting best practices and linking individuals who operate successful programs with those wishing to start down the same path.
Linking MFIs with Academics for Evaluations: Health and microfinance programs appear to be filling a distinct need and producing positive results. Few, however, have had academic evaluations. Participants said that they would like to see an increase in the evidence base on the impact of such hybrid programs, and expressed an interest in improving the number and quality of formal evaluations. The CoP can help connect academics and research groups interested in evaluating health/microfinance programs with practitioners that are looking to collect more rigorous data on their impact.
Linking MFIs with Health Organizations: The majority of existing health/microfinance programs in Peru are operated in-house by the MFI, an arrangement that raises questions of cost and sustainability. In fact, in many cases, the MFI’s financial services help subsidize the provision of care. Given the financial and operational challenges of entering the health space, MFIs recognize the benefits of partnering with existing health organizations to provide education and care to their clients. However, MFIs often have difficulty finding quality and reliable partners. The CoP can play a role in mapping the health care space in the country and fostering partnerships between MFIs and health groups.
The Peruvian CoP is part of a region-wide initiative; similar groups are being formed in Bolivia and Ecuador. Although pushing this work forward will not be without its challenges, there is a great deal of excitement around this community and participants from both sectors agree that there is a lot of potential for this CoP to further the reach and impact of MFIs and the health sector within Peru and the Andean Region broadly.