Health remains a major barrier to economic development in poor rural areas. Access to effective health products, whether preventive or curative, has so far remained limited due in large part to poverty and the absence of financial markets that would enable poor households to invest in health on credit. Given such constraints, poor households should save in anticipation of future health shocks. However, substantial evidence suggests that they lack adequate savings products, and, as a result, households are quite vulnerable to health shocks. In order to afford medical expenditures, they resort to drawing down productive assets or business capital or to other costly risk-coping strategies.
Results show significant demand for such savings products, and extremely high take-up of all four treatments, suggesting that the primary aspect of all the treatments is in their common feature: providing a safe place to protect money from others.
The Health and ROSCA Project (HARP)- In rural areas, IPA is working with 180 ROSCAs (Rotating and Savings Credit Associations).The ROSCAs are offered commitment saving devices to which their members can individually decide to subscribe. By comparing health investments across groups, the project will be able to measure the impact of these devices on household health.
Members of the ROSCAs are given a locked metal box (with a deposit slit) in which they could save at home. In one group (the Safe Box group), people got the key to the lock, and therefore could take out money from their box whenever they wanted and even spend it on non-health products. In the other group (the Lock Box group),they did not receive the key and had to call the program officer to get the box opened and were told that the money in the box, once opened by the research team, could only be used to buy a health product.
In the third treatment group, individuals were encouraged to use their existing ROSCA to create a Health Pot,in addition to the regular ROSCA pot where they would contribute an additional amount during regular meetings that would fund a side pot earmarked towards the acquisition of a preventative health product. Finally, individuals in the fourth treatment group were encouraged to save in an individual Health Savings Account held at the ROSCA and earmarked for emergency health costs.