Microfinance and HIV/AIDS
Because of the high prevalence rate especially in Africa, and the far-reaching social, cultural and economic consequences, the HIV/AIDS epidemic can no longer be ignored. If affects not only the health situation of individuals, but households, communities and society as a whole. As a result the market place of microfinance institutions (MFIs) changes, and hence demand for financial products. The care for sick relatives and orphans has tremendous financial repercussions in terms of medical costs and lost business income as most caregivers have to reduce their income earning activities and draw from their business capital to meet expenses. In addition women often divert their attention from the enterprise as they care for the sick.
Although crises not related to HIV/AIDS (like malaria and other diseases, death of relatives, loss of property) do happen more frequently, they come in isolation. HIV/AIDS, on the other hand, triggers a series of crises that require an entire arsenal of coping mechanisms. Or like a client of an MFI in Uganda said: 'AIDS does not kill suddenly, but it comes and takes a lot of money with is.'
What can MFIs do? It is not their task to provide AIDS support services. However as said, fighting HIV/AIDS is complex as gender disparities, traditions, lack of access to information, poverty, structural insecurity all play a role in the spread of HIV/AIDS and its impact. Consorted efforts are therefore needed. MFIs can play a role given their contribution to poverty alleviation, reduced vulnerability and economic empowerment of women. In addition MFIs can contribute to providing access to health care via insurance products.
Different categories of strategies for MFIs to deal with HIV/AIDS are distinguished, being:
- Prevention strategies (for MFIs and MICs)
- Product adjustments (for MFIs)
- Introduction of new products other than insurance (for MFIs)
- Introduction of insurance services (MFIs and MICs.
MicroSave, in it's study 'HIV/AIDS—Responding To A Silent Economic - Crisis Among Microfinance Clients', suggests that product or service development and refinement should capitalize on clients’ ability to:
* Plan for future crisis (anticipate needs for lump sums of cash)
* Improve and maintain income flows
* Avoid selling productive assets, which undermine future income
earning capacity
* Retain access to financial services, particularly post-crises
MicroNed has choosen microfinance and HIV/AIDS as one of it's themes to develop and distribute knowledge on, with Hivos as the theme coordinator.