The paper compares three Health Microinsurance (HMI) schemes in Bangladesh that are associated with microfinance institutions (MFIs). Leading up to this paper wrap-up, which concludes the four part series on HMI in Bangladesh, MicroCapital published a case study on each of them: Part I on Grameen Kalyan (GK); Part II on Bangladesh Rural Advancement Committee’s (BRAC) Micro Health Insurance for Poor Women in Bangladesh (BRAC MHIB); and Part III on the Society for Social Services (SSS).

The cost of health care is a major obstacle to those trying to break out of the poverty cycle. In Bangladesh, public health services are urban-based and elite-biased (p.vi). For the poor and rural dwellers, nongovernmental organizations (NGOs) are often the only source (p50) of health services. MFIs have advantages in setting up HMI schemes in that they already possess the infrastructure, workforce, and resources.

All three of the studied HMI schemes pool risks over their target populations by subsidizing health services in exchange for health card fees (USD 0.34 to USD 2.04 ) (p30,p25), which act as premiums. Health cards contain photos and details of the beneficiaries in order to control against fraudulent use of services. GK and SSS act as both a health service insurer and provider. BRAC MHIB insures services provided through associated organizations. All three schemes also use a co-payment system, in which the user pays an additional cost at the time of service (USD 0.03 to USD 0.51)(p19,p30). Besides generating additional revenue, the co-payments (p53) mitigate the overuse of services.

The first challenge identified for HMI programs is marketing (p51-52). Large membership is necessary for any HMI scheme to be successful because it creates an economy of scale by reducing administrative costs per borrower. Poor clients generally do not have an understanding of risk pooling. They are reluctant to part with their funds until they face illness or accident. HMI schemes must therefore use educational programs (p55) to change the behavior of their user groups. Field staff are in a position to explain the merits of HMI, as well as assess the client’s individual needs, and thus play an important role in recruitment.

Due to their geographical range and infrastructure, HMI schemes can participate in national health campaigns (p50) such as immunization programs, safe drinking water, sanitation, and education on family planning, antenatal care, puberty, gender difference, tuberculosis, HIV/AIDS, and STDs. During these campaigns, HMI schemes can promote their product through door-to-door visits, forums, and community meetings.

Other challenges identified include reducing overhead costs (p53) and preventing members from dropping out after their coverage expires. In order to reduce overhead, premiums can be collected directly from members’ savings account (p53). Simple reimbursement (p53) systems also reduce overhead costs, and make the scheme more understandable to clients. Financial incentives, such as ‘no claims discounts’ (p52) enhance membership renewals.

The major challenge faced by the three HMI schemes is financial viability (p54). To have successful client relationships and impact on poverty, product terms and prices must be decided in consultation with the clients. However, the paper argues (p54), “A direct consequence of the organizations prioritizing their social agendas over financial sustainability is that operational costs are not recovered.” All three organizations deliberately overlook risks (p53) of adverse selection and enroll members without any restrictions. BRAC MHIB and SSS provide free treatment to the very poor. GK does not provide any free services.

All three HMI schemes provide treatment to non-members for a higher cost. The strategy to serve the community at large, and cross-subsidize the poor (p50) through a sliding scale that charges the less-poor higher premiums and co-payments, appears to have some merit in meeting part of the operations shortfall. One challenge to such a strategy is to market the program to attract the less poor.

With all of the resources and expertise of BRAC and Grameen, neither they nor SSS have been able to meet their operating expenses from premiums and fees. BRAC MHIB and SSS are not financially viable (p54) without subsidy. The parent organizations may continue to subsidize their HMI programs, but at the expense of their other activities. It is unlikely that donors will support HMI indefinitely.

GK has an operating loss, but is viable after investment income. GK received a large endowment fund (p54) from its parent organization, which it has since paid back. Donors or parent organizations can use this mechanism instead of subsidizing operations indefinitely.

The paper concludes (p54-55), “To be sustainable the three HMIs need to reassess their premium rates to reflect reality, increase renewal rates and encourage timely renewal, and reduce their overhead through efficient management.”

By Ryan Hogarth, Research Assistant

Additional Resources:

Bangladesh Rural Advancement Committee (BRAC): Home

Grameen Kalyan: Home

MicroCapital article, April 27, 2009: “Bangladeshi Society for Social Services (SSS) Subsidizes Health Microinsurance Scheme with Microfinance and Investment Profits”

MicroCapital article, April 27, 2009: “MICROCAPITAL STORY: BRAC provides Micro Health Insurance in Bangladesh. Lessons in Financial Viability.”

MicroCapital article, April 22, 2009: “Grameen Kalyan offers Health Microinsurance for USD 1.73 Per Year and Partners with Pfizer Inc, GE Healthcare, and Mayo Clinic. Is it Economically Viable?”

MicroCapital article, March 25, 2009: Scalable and Sustainable Micro Health Insurance Just Around the Corner?

“Health Microinsurance: A Comparative Study of Three Examples in Bangladesh”, by Mosieh Ahmed, Syed Khairul Islam, Md. Abul Quashem and Nabil Ahmed, CGAP Working Group on Microinsurance, Case Study No.13: September 2005

Society for Social Services: Home

The Society for Social Services (SSS) is a nongovernmental organization (NGO) that was established in the Tangail district of central Bangladesh in 1986. It has since expanded to serve 12 districts of Bangladesh. SSS’ principle focus is its microfinance program, which was established in 1992. However, it also has programs in agriculture, fisheries, child development and education, and prevention of child labor.

SSS Health Program began in January 1996, in response to 16 childbirth-related deaths of SSS borrowers and staff. Within a year, SSS established a 20-bed hospital in a rented house in the town of Tangail. The hospital was financed through donations from numerous philanthropies and SSS staff, each of which donated a week’s salary. In January 2004, SSS upgraded to a 52-bed hospital with technical and financial assistance from Dutch charity Terre des Hommes (TdH). SSS also operates 16 rural clinics. Each clinic has one non-graduate full-time paramedic called a Health Assistant, and a part-time female Traditional Birth Assistant (TBAs). Qualified medical practitioners from the hospital visit the rural clinics once or twice a month.

Like Grameen Kalyan and BRAC’s Health Microinsurance (HMI) schemes, SSS’ HMI program operates using a health card system. Health cards are purchased by SSS microfinance borrowers for a registration fee of USD 0.34, equivalent to a premium. Enrolment is compulsory for all SSS borrowers living in the six sub-districts in Tangail in which the hospital and 16 clinics are located. SSS staff members can also purchase health cards for USD 0.17.

Cardholders are entitled to subsidized basic health care at a SSS clinic with a copayment of USD 0.57. Complicated cases are referred to the SSS hospital, which houses facilities for pathology tests, electrocardiography (ECG), ultra-sounds, and x-ray. If a cardholder is referred to the hospital, they receive a 30 percent (p30) discount on hospital charges.

Borrowers living outside of the six sub-districts cannot become cardholders, but can receive service from the clinics for a consultation fee of USD 0.68. Non-borrowers can also receive service, for a consultation fee of USD 0.85 (p30). The purpose of the fee structure is to cross-subsidize (p29) the SSS borrower’s registration fees with higher costs to non-cardholders. However, all fees were decided on through consultation with the community to determine affordability, and all prices are offered at a subsidized rate (p30).

As of November 2004, SSS Health Program had 45.4 thousand users, of which 27 thousand cardholders were SSS borrowers; 1193 cardholders were staff members; 9050 users were SSS borrowers from outside the six sub-districts; and 8110 (p29) users that were non-borrowers. SSS’ website does not provide information on current user numbers.

The only financial data available for SSS Health Program is from 2002 to 2004 in which it recorded an operating loss of USD 257 thousand. Head office expenses amounted to a surprising 60 percent of its operating expenses, at USD 161.3 (p49). SSS Health Programs main source of funds were investments earmarked for it by the parent NGO, and subsidies from the microfinance program’s profits. From 2002 to 2004, SSS Health Program received USD 218.8 thousand from investments and USD 40.2 thousand (p49) in subsidies.

In June 2004, SSS microfinance program reported USD 6.4 million in loans outstanding to 90 thousand active borrowers, USD 10.3 million in total assets, a return on assets (ROA) of 3.21 percent, and a profit margin of 15.59 percent to the MIX Market, the microfinance information clearinghouse. At the time, a CGAP research paper revealed that the parent NGO had no intention of cutting off subsidies to the Health Program. The paper argued (p49), “SSS Health Program has the potential to reach financial viability by revising its charges, improving the renewal rates, and rationalizing some of its head office expenses.”

Since 2004, the SSS microfinance program has grown substantially. In June 2008, it recorded USD 27.8 million in loans outstanding to 255 thousand active borrowers. It had USD 41.7 million in total assets, a 0.16 percent ROA, and a profit margin of 0.80 percent. Information is not available on what progress SSS Health Program has made in reaching financial viability.

By Ryan Hogarth, Research Assistant

Additional Resources:

“Health Microinsurance: A Comparative Study of Three Examples in Bangladesh”, by Mosieh Ahmed, Syed Khairul Islam, Md. Abul Quashem and Nabil Ahmed, CGAP Working Group on Microinsurance, Case Study No.13: September 2005

MicroCapital article, April 22, 2009: “Grameen Kalyan offers Health Microinsurance for USD 1.73 Per Year and Partners with Pfizer Inc, GE Healthcare, and Mayo Clinic. Is it Economically Viable?”

MicroCapital article, April 27, 2009: “MICROCAPITAL STORY: BRAC provides Micro Health Insurance in Bangladesh. Lessons in Financial Viability.”

MicroCapital article, March 25, 2009: Scalable and Sustainable Micro Health Insurance Just Around the Corner?

Mix Market: Society for Social Services (SSS) Profile

Society for Social Services: Home

Terre des Hommes Netherlands: Home

BRAC was founded in 1972 as a small social relief project for victims of the 1970 cyclone and 1972 Liberation War. It has since grown to be one of the largest nongovernmental organizations (NGOs) in the world. BRAC’s largest program is its microfinance operations, which in 2008 loaned more than USD 1 billion to 6.4 million borrowers. However, it also has a variety of other development programs. In the mid-1990s, BRAC began establishing health centers around Bangladesh that provide basic health services, and as of 2005, there were 37 such centers (p15). Much of BRAC’s success has been attributed to the fact that eighty percent of its activities are self-financed. In order to insure a financially sustainable model for the health centers, BRAC introduced user fees. However, poorer segments of the population were unable to afford the costs. To address issues of equity and affordability, and to better finance its clinics, BRAC established a pilot health microinsurance (HMI) scheme in July 2001. The Micro Health Insurance for Poor Rural Women in Bangladesh (MHIB) was formally launched in November 2001 with a three-year contract (p16) to receive funding and technical support from the International Labor Organization (ILO).

Grameen Kalyan and BRAC’s MHIB differ in that Grameen Kalyan is both a health service insurer and provider, and MHIB is only an insurer. MHIB is administered by BRAC, but is a separate entity (p.vi) from BRAC’s health centers. MHIB reimburses BRAC’s health centers for the services they provide to BRAC MHIB members.

The program offers four health insurance packages:

1) The General Package (p28): Policyholders receive a health card upon payment of annual premium. Once insured, cardholders receive services with a copayment at BRAC health centers. Policyholders of the general package receive the following subsidized services (p28): doctor consultation, a free annual check-up for the head of the household, pathology testing, discounted medicine, and birth deliveries. The amount of the annual premium is determined by family size and membership in the BRAC microfinance program. For members of the BRAC microfinance program, the premium is USD 1.45 to USD 2.90. For those who are not members of the BRAC microfinance program, annual premium is USD 2.90 to USD 4.35 (p28). BRAC MHIB offers one-time limited subsidies upon referral to government and private sector hospitals for cases that BRAC health centers are not equipped to handle.

2) Equity Package (p28): BRAC refers to the extreme destitute as ‘ultra-poor’. The Equity Package was introduced in an effort to cross-subsidize the enrolment costs of ultra-poor with the premiums paid by non-members of the BRAC microfinance program. The package includes (p28) free enrollment, free consultations, free routine pathological tests, free yearly health check-ups with essential diagnostic tests, a discount of up to 80 percent on essential medicines, follow up home visits, subsidies of up to USD 14.40 upon referral to a hospital, and free transport to the hospital.

As of October 2004, the General Benefit and Equity Packages had 7816 policyholders (6776 BRAC microfinance members, 700 non-members, and 340 ultra-poor), covering an estimated 39 thousand beneficiaries (p17).

3) Prepaid Pregnancy Related Care Package (p28): From a study (p17) conducted in 2001, BRAC MHIB determined that due to lack of funds, women visited clinics on average three times during a pregnancy, and only when conditions seemed desperate. The Prepaid Pregnancy Related Care Package was introduced in 2002 in order to encourage monthly checkups. The package includes (p28) free monthly antenatal check-ups, a free monthly supply of iron and folic acids supplements, a Tetanus Toxoid immunization, a safe delivery kit, a discount for delivery at a BRAC health center, a post natal home visit for the mother and new born, and a one-time limited subsidy for any treatment of complications upon referral to a hospital. The premium for this package is USD 0.73 for BRAC microfinance members and USD 1.01 (p28) for other community members. Enrollment for the ultra-poor is free. At the end of 2004, the Prepaid Pregnancy Related Care Package had 3442 policyholders (p17).

4) School Health Package (p29): A pilot School Health Package was introduced at one school in January 2004. For an annual premium of USD 0.17 (p29), the package provides the schoolchildren with free annual check-ups, free biannual immunization against common intestinal worms, free supplementary iron tablets for girls, and a 10 percent discount on pathological tests. At the end of 2004, 1000 of the 1200 students in the school were enrolled in the school health package.

In total, BRAC MHIB had 12.3 thousand policyholders in 2004, covering an estimated 43.5 thousand (p14) individuals. Unfortunately, BRAC MHIB had major issues with members not renewing their policies once they expired, as described in the BRAC research paper, “Micro Health Insurance (MHI) Pilot of BRAC: A Demand Side Study”. Furthermore, BRAC MHIB did not base the price of premiums on a feasibility study. Instead, its field staff held informal discussions with community members to determine an affordable price. All premiums and fees charged to members of the BRAC microfinance program are at a subsidized rate.

From 2002 to 2004 BRAC had an operating loss of USD 95 thousand (p48). Unlike Grameen Kalyan, BRAC MHIB did not have any investment fund, reserves, or assets of its own. It survived with USD 114 thousand (p32) in subsidies from 2002 to 2004 – this in an organization that had a total expenditure of USD 138 thousand (p33) over the same three years.

The BRAC MHIB case study demonstrates the necessity for efficiency, innovation, scale, and alternative sources of funding in creating a financially sustainable HMI program. A study conducted in May 2005 to find possible ways of increasing the program’s sustainability. The report recommended (p48) the following:

- Reduce head office staff from two to one

- Reduce field staff to two per field location

- Increase outreach and premiums

- Introduce late renewal penalty on premiums

- Introduce no-usage renewal discount on premiums

- Experiment with more innovative concepts

BRAC MHIB management decided to implement the recommendations, but realized that it would be several years before the program would be financially sustainable. It requested continued assistance from the ILO, but the ILO made its last installment into MHIB in 2005 (p31). According to a 2005 CGAP research paper (p48), “It will not be possible for BRAC MHIB to continue its operations without financial support from a donor or its parent organization.” MHIB was still operating in 2006 with an unspecified amount of support from its parent organization, but its continued existence was questionable.

The only information on MHIBs activities since 2006 is from BRAC’s homepage, which currently states, “The Health Micro Insurance scheme is developing a sustainable community-health financing model to increase the community’s access to health treatments and safeguard household health security for the poor.” It is unclear whether BRAC continues to subsidize MHIB’s operations, or whether MHIB continues to operate in the same capacity as before.

By Ryan Hogarth, Research Assistant

Additional Resources:

Bangladesh Rural Advancement Committee (BRAC): Home

BRAC: Audit Report 2006

BRAC: Health Report 2006

“Exploring the perceptions of ultra poor for low utilization of micro-health insurance schemes, BRAC, Bangladesh: A Qualitative study” by Manjula Singh, James P. Grant School of Public Health BRAC University

“Health Microinsurance: A Comparative Study of Three Examples in Bangladesh”, by Mosieh Ahmed, Syed Khairul Islam, Md. Abul Quashem and Nabil Ahmed, CGAP Working Group on Microinsurance, Case Study No.13: September 2005

MicroCapital article, April 22, 2009: “Grameen Kalyan offers Health Microinsurance for USD 1.73 Per Year and Partners with Pfizer Inc, GE Healthcare, and Mayo Clinic. Is it Economically Viable?”

“Micro Health Insurance (MHI) Pilot of BRAC: A Demand Side Study”, by Imran Matin, Nuzhat Imam and Syed Masud Ahmed, BRAC Research and Evaluation Division: December 2005

May 7, 2009, 6:00pm-8:00pm, New York University Law School, Lipton Hall, 108 West 3rd Street, New York, NY 10012

Cost: Free

Summary of Event: The event will include a Panel Discussion on the issues brought up in “Portfolios of the Poor”, a book signing, and a wine and cheese reception.

Background on Organizers:

The Financial Access Initiative is an association of researchers at New York University (NYU), Yale, Harvard and Innovations for Poverty Action (IPA) that are searching for ways to create more inclusive financial systems. The Initiative conducts research on the nature of the demand for financial services, and mechanisms to increase the scale and impact of financial services. Findings are used to describe policy options for central bankers, regulators and other key decision makers. The Initiative is located at the Wagner Graduate School of Public Service at NYU. Jonathan Morduch (NYU professor and co-author of “Portfolios of the Poor”) is the Managing Director. Dean Karlan (Yale University) and Sendhil Mullainathan (Harvard University) act as Directors. The Financial Access Initiative with launched in 2006 with a USD 5 million grant from the Bill and Melinda Gates Foundation, and an unspecified amount from American International Group, Inc (AIG).

Africa House is a is an inter-disciplinary group of professors and students at NYU that research Economic, Political and Social issues in Africa, as well as contemporary African Art. The group hosts a talks, seminars, policy luncheons, and smaller discussion groups and research presentations on topics pertaining to Africa. It also offers a series of scholarships to students at NYU conducting research on the continent. Africa House carries out its programs at various venues provided by NYU, however plans are in progress to acquire its own home. Africa House is supported by donations to the Africa House Fund. No financial information is provided on the fund. The group is currently conducting a Friends of Africa House campaign, requesting tax-deductible gifts of at least USD 1000. To make a donation, please refer to this website.

Event Themes and Discussion Topics:

“Portfolios of the Poor: How the World’s Poor Live on $2 a Day” examines how the world’s poorest households manage their financial lives. The authors collected financial diaries of 300 low-income households in both urban and rural areas in Bangladesh, India and South Africa. The data shows that the poor manage their financial lives with sophistication and complexity. The book can be purchased online at Amazon.com

Who Is Invited to Attend: Everyone

About the Presenters

Rogan Kersh, the Associate Dean of NYU Wagner School of Public Service, will give the opening remarks.

The Panel Discussion will include the following:

- Matthew Bishop, Chief Business Writer/American Business Editor of The Economist

- Daryl Collins, Co-author of “Portfolios of the Poor”, Senior Associate at consulting firm Bankable Frontier Associates

- Bill Easterly, Professor of Economics at NYU, author of “The White Man’s Burden”

- Jonathan Morduch, Co-author of “Portfolios of the Poor”, Professor of Public Policy and Economics at NYU, Managing Director of Financial Access Initiative

- Yaw Nyarko, Professor of Economics at NYU, Director of Africa House

Online Registration Address: http://wagner.nyu.edu/events/fai-05-07-2009

For additional information, please contact:

NYU Africa House

3 Washington Square Village Suite 1F, New York, NY 10012

Email: africa.house@nyu.edu

Submit Your Event: http://microfinanceassociation.ning.com/events

By Ryan Hogarth, Research Assistant

Additional Resources:

Amazon.com: Purchase “Portfolios of the Poor: How the World’s Poor Live on $2 a Day”

Africa House: Home

Financial Access Initiative: Home

Financial Access Initiative: Summary of “Portfolios of the Poor: How the World’s Poor Live on $2 a Day”, Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlando Ruthven, published by Princeton University Press: April, 2009

]]> http://www.microcapital.org/microfinance-event-the-financial-access-initiative-and-africa-house-host-panel-discussion-and-book-launch-%e2%80%9cportfolios-of-the-poor%e2%80%9d-by-daryl-collins-jonathan-morduch-stuart-rutherf/feed/ 0 http://www.microcapital.org/microcapital-story-grameen-kalyan-offers-health-microinsurance-for-usd-173-per-year-and-partners-with-pfizer-inc-ge-healthcare-and-mayo-clinic-is-it-economically-viable/?utm_source=rss&utm_medium=rss&utm_campaign=microcapital-story-grameen-kalyan-offers-health-microinsurance-for-usd-173-per-year-and-partners-with-pfizer-inc-ge-healthcare-and-mayo-clinic-is-it-economically-viable http://www.microcapital.org/microcapital-story-grameen-kalyan-offers-health-microinsurance-for-usd-173-per-year-and-partners-with-pfizer-inc-ge-healthcare-and-mayo-clinic-is-it-economically-viable/#comments Wed, 22 Apr 2009 06:42:12 +0000 Ryan Hogarth http://www.microcapital.org/?p=3231 This article on Grameen Kalyan is the second in a series of MicroCapital case studies on Health Microinsurance (HMI) schemes in Bangladesh.  Please also refer to Part II on the HMI scheme of the Bangladesh Rural Advancement Committee (BRAC MHIB); Part III on the Society for Social Services (SSS); and Part IV, a wrap-up of the CGAP research paper “Health Microinsurance: A Comparative Study of Three Examples in Bangladesh”.

At present, free healthcare for the poor in Bangladesh exists only theoretically. Public health services are urban-based, elite-biased, and curative-oriented (p.vi). A case study on health microinsurance (HMI) by the Consultative Group to Assist the Poor (CGAP) discovered that less than 40 percent (p.10) of the population has access to basic health services. The paper states that health risks (p.1) requiring medical treatment costs are some of the most common concerns to low-income households and act as major barriers to breaking out of the poverty cycle. It cites a study conducted in 1992 with members of Bangladeshi microfinance institution (MFI) Grameen Bank, which concluded that after 10 years of borrowing 58 percent had lifted themselves out of poverty, compared to 18 percent of non-borrowers. Of the 42 percent who failed to cross the poverty line, 60 percent (p.22) had an illness drain family resources.

The World Health Organization (WHO) identified inadequate healthcare delivery systems and inadequate healthcare financing mechanisms as two of the biggest obstacles to improving health outcomes of the poor. To fill these niches, several nongovernmental organizations (NGOs) in Bangladesh have begun to play the role of health provider and/or insurer. Grameen Kalyan offers both.

Grameen Kalyan (Bengali for “Village Well-being”) was established in 1996 as a sister NGO of the Grameen Bank, when it was handed 10 functioning clinics by Grameen Trust, another sister NGO with the mission of spreading Grameen’s microfinance model through a Build-Operate-Transfer (BOT) model. Since then, Grameen Kalyan has expanded to 38 health centers that act as both insurers and providers of primary health services. Most of the health centers are attached to a Grameen Bank branch. The area covered by each center corresponds to that of the branch, and usually has a radius of about eight kilometers. Each center is run by one office manager, two doctors, one paramedic, one laboratory technician, and six health assistants.

In addition to the 10 clinics, Grameen Kalyan also received a USD 42.5 million (p.23) endowment fund from the Grameen Bank to generate income for its health microinsurance (HMI) scheme. The endowment fund was put into savings, generating income until 2002, at which point it was returned. From 2002 to 2004, the International Labour Organization (ILO) granted Grameen Kalyan USD 378 thousand, and transferred a total of USD 750 thousand (p.49) to the NGOs reserves.

Grameen Kalyan also generates funds through its HMI scheme. The HMI clients pay a yearly insurance premium (USD 1.73 a year for Grameen Bank members and USD 2.17 for non-Grameen Bank members) which covers up to six family members. Upon a visit to a health centers, cardholders pay an additional co-payment of USD 0.14. Besides generating more revenue, the co-payment is a strategy to prevent cardholders from overusing the services (p.3). Cardholders get one free routine checkup per year, and can also purchase medicines at a discounted rate. Grameen Kalyan does offer services to non-cardholders, but at a more expensive rate. For more information on product features and policies, please refer to Grameen Kalyan’s website.

According to the website, in 2007 the NGO treated an aggregate 321 thousand patients at health centers, and provided domiciliary services to 2.5 million villagers. Its operational cost recovery rate increased from 38 percent in 1997 to 93 percent in 2007. Unfortunately, Grameen Kalyan’s website does not provide any further financial information.

The most the most up-to-date financial information for Grameen Kalyan is from the 2005 CGAP case study on HMI in Bangladesh. In October 2004, Grameen Kalyan had 58 thousand cardholders (51 thousand members of the Grameen Bank and 7 thousand nonmembers), covering an estimated 290 thousand beneficiaries (p.23). Grameen Kalyan’s operating loss from 2002 to 2004 was USD 388 thousand. However, it generated USD 945 thousand from investments of the profit generated from the endowment fund as well as other funds, resulting in a net gain of USD 557 thousand (p.49). The case study states (p.49), “Grameen Kalyan has been able to meet its operating expenses fully from the revenue from cardholders and investments for the past three years. Grameen Kalyan’s experience shows that with an injection of a large endowment fund for a limited period, and with sound investment management, it is possible to reach financial viability.” In order to assess the Grameen Kalyan’s current financial viability, or how near the HMI scheme is to being self-financed, more information is required.

Matthew Jowett, senior health financing specialist at the WHO, says, “This in itself is a major achievement – generating a profit, however, would be far more problematic.” He attributes the success of Grameen Kalyan in creating a nearly self-financing HMI scheme to “covering only small risks, that is, low-cost care in primary clinics, having low operating costs, for example labor, and achieving scale in terms of membership.”

It is true that Grameen Kalyan covers only small risks. For example, it will finance only up to USD 29 for a caesarian birth, and if the health center refers a client to the hospital, then Grameen Kalyan will pay the family USD 7.25 to USD 29 per year. The focus of the insurance scheme is rather on preventative measures. The health centers provide primary treatment and advice on maternal health and family planning methods. Technicians conduct routine pathological tests on patients referred by the doctor. And, health assistants provide door to door basic healthcare services and dissemination of health education.

In September 2008, Grameen Kalyan collaborated with Pfizer Inc., General Electric (GE) Healthcare, and Mayo Clinic in pursuit of scalable models of healthcare and micro health insurance delivery in Bangladesh. Each of the partner organizations was chosen due to its respective field: Pfizer is a global research-based pharmaceutical company, GE Healthcare is a global manufacturer of medical devices such as ultrasounds, and Mayo Clinic is a large non-profit that operates medical schools, and medical treatment and research centers in the United States. The partners will evaluate ways to improve Grameen Kalyan’s existing system, and in September 2009, will propose business models that aim to scale and replicate the model in other developing nations.

Grameen Kalyan’s new alliance will reportedly focus on the following five areas:

(1) Implementing primary health promotion and disease prevention programs, including maternal and child health promotion and nutrition programs.

(2) Expanding Grameen Kalyan’s current healthcare delivery and HMI programs.

(3) Establishing permanent training programs for nurses, technicians and physicians.

(4) Reviewing operating efficiencies and the types of services offered by Grameen Kalyan’s clinics.

(5) Introducing genomic, epidemiological, and outcomes research capability to increase prevention and treatment of diseases particular to Bangladesh

The goal of Grameen Kalyan’s partnerships will be to develop social business models of healthcare delivery that are entirely financially self-supporting, with all profits re-invested into the mission of reaching more poor clients. According to Grameen Bank founder Muhammad Yunus, “Only an economically viable solution can create the infrastructure needed to enable people to sustain themselves, alleviating the poverty cycle.”

By Ryan Hogarth, Research Assistant

Additional Resources:

Business Wire: Grameen Health to Establish Independent Collaborations with Pfizer, GE Healthcare, and Mayo Clinic to Create Sustainable Healthcare Delivery Models for the Developing World

Grameen Kalyan: Home

“Health Microinsurance: A Comparative Study of Three Examples in Bangladesh”, by Mosieh Ahmed, Syed Khairul Islam, Md. Abul Quashem and Nabil Ahmed, CGAP Working Group on Microinsurance, Case Study No.13: September 2005

MicroCapital article, March 25, 2009: Scalable and Sustainable Micro Health Insurance Just Around the Corner?

OneWorld South Asia: Grameen Health partners leading medical care providers

April 29, 2009, 9:30am-11:00am EST, New American Foundation Head Office, 1899 L Street NW, Washington DC, 4th Floor

The New America Foundation, a nonprofit and nonpartisan public policy institute, will host a discussion on the new Global Assets Project policy brief, “Savings-Linked Conditional Cash Transfers (CCTs): A New Approach to Global Poverty Reduction.” The policy brief, published April 2009 by the New America Foundation, was written by Jamie M. Zimmerman, Deputy Director of the Global Assets Project, and Yves Moury, Chief Executive Officer South African financial services company Edge Finance. CCT Programs (p3) are government subsidized anti-poverty strategies that offer economic assistance to individuals or households based on behavioral conditions. The conditions aim to encourage behaviors such as regular school attendance and health checkups for children; pre and post-natal care for pregnant women; participation in job training courses; or participation in community development projects or community services. Traditionally, the economic assistance has been delivered in person in the form of cash or food aid (p7). However, the policy brief makes the case for delivering CCTs through government to person (G2P) cash transfers (p4) directly into savings accounts as a two-pronged strategy of more efficiently supplementing income and building productive assets. The savings accounts would be managed by banks or microfinance institutions.

In addition to the two authors, discussion panelists will include Michelle Adato, a Senior Research Fellow at the International Food Policy Research Institute (IFPRI); Mark Pickens, a Microfinance Analyst at the Consultative Group to Assist the Poor (CGAP); Marguerite Robinson, Independent Consultant and author of “The Microfinance Revolution”; and Luis Tejerina, an Economist at the Inter American Development Bank (IDB).

The discussion will run from 9:30am to 11:00am EST on April 29 at the New American Foundation head office, located on the fourth floor of 1899 L Street NW, Washington DC. A map and directions are available here. A light breakfast will be served. Registration is free at this link. The event will also be webcast live at this link. Registration is not necessary for the webcast, however Flash Player 9 will be required to watch the event remotely. For more information please contact the New American Foundation by phone at 202-986-2700 or via the online feedback form on the foundation’s website.

The Global Assets Project was launched in 2006 by the Center for Social Development at Washington University in St. Louis and the Asset Building Program of the New America Foundation. Its mission is to advance public policies around the world that build savings and assets for poor.

By Ryan Hogarth, Research Assistant

Additional Resources:

Center for Social Development: Home

Edge Finance: Home

Global Assets Project: Home

New America Foundation: Gateways to Global Poverty Reduction and Financial Inclusion

New America Foundation: Home

New America Foundation: Jamie M. Zimmerman

“Savings-Linked Conditional Cash Transfers: A New Policy Approach to Global Poverty Reduction”, by Jamie M. Zimmermann and Yves Moury, A Global Assets Project Policy Brief, New America Foundation: April, 2009

April 28 – 30, 2009, participate online: http://www.microlinks.org/ev.php?ID=37239_201&ID2=DO_COMMUNITY

The United States Agency for International Development’s (USAID) microfinance and microenterprise development news-source, microLINKS, will host its thirty-second Speaker’s Corner on the topic of value chain development for vulnerable populations. Microfinance plays an important component of value chain finance, defined as “financial products and services that flow to or through any point in a value chain in order to increase returns on investment and growth and competitiveness of that value chain.” Practitioners are invited to share and learn from each other’s experiences by posting messages about their own experiences, questions and comments on this webpage. Each of the three days of the Speaker’s Corner will have a different topic and a different facilitator:

- Day One (April 28): Involving vulnerable populations

Ben Fowler, Senior Consultant and Project Manager for Mennonite Economic Development Associates (MEDA), will facilitate the first discussion on what barriers prevent participation of vulnerable populations in value chain development programming, and what strategies are required to ensure their involvement.

- Day Two (April 29): The politics of crisis

Luis Osorio, the International Coordinator for the Markets Livelihoods programme of non-governmental organization Practical Action, will facilitate the second discussion on how the use or abuse of power in a crisis affects the impacts of value chain programs for vulnerable populations.

- Day Three (April 30): Adjusting practice to context

Christian Pennotti, a Program and Learning Coordinator at global non-profit Academy for Educational Development (AED), will facilitate the third discussion focusing on how programs can adjust their approach to fit the context of vulnerable populations, such as populations in conflict and post disaster settings, and those characterized by high rates of HIV/AIDS.

Registration for the online discussion is free, and can be done by filling out the form at this link. Any technical or conceptual questions regarding microenterprises can be emailed to hotline@microlinks.org. For any general questions or comments, please email microlinks@microlinks.org.

MicroCapital’s recently released a Paper Wrap-Up on USAID’s March edition of microLINKS Connections, which summarized three USAID microREPORTS that provide more information on value chain finance:

“Striving toward a Competitive Industry: The Importance of Dynamic Value Chain Facilitation,” by David Knopp, Emerging Market Groups: September 2008

“Facilitating Behavior Change and Transforming Relationships: Field Application of Key Value Chain Principles,” by Marian Boquiren and Ivan Idrovo, Strategic Development Corporation Asia: October 2008

“Butterflies, Elephants and Icebergs: Using Language and Data to Mobilize Value Chains,” by Rob Henning, Neal Donahue and Eric Kacou, OTF Group: October 2008

For a list of upcoming topics in USAID’s monthly Speaker’s Corner series, see the main Speaker’s Corner page. For more information on April’s Speaker’s Corner on value chains for vulnerable populations, please refer to this link.

By Ryan Hogarth, Research Assistant

Additional Resources:

Academy for Educational Development (AED): Home

Mennonite Economic Development Associates (MEDA): Home

MicroCapital article, March 11, 2009: PAPER WRAP-UP: “microLINKS Connections, March 2009,” by USAID

microLINKS: Home

microLINKS: Information about the discussion host and forum facilitators

microLINKS: Main Speaker’s Corner Page

microLINKS: Speaker’s Corner Registration April 2009

microLINKS: Speaker’s Corner 32: Value Chains for Vulnerable Populations

Practical Action: Home

USAID: Home

April 17, 2009, Grand Hyatt New York, 109 East 42nd Street at Grand Central Terminal, New York, NY

Muhammad Yunus and President Bill Clinton will be Keynote Speakers at the Second Annual Geogetown Global Forum, which will examine development in the midst of the global financial crisis. Muhammad Yunus founded Bangladeshi microfinance institution (MFI), the Grameen Bank in 1976, and won the Nobel Peace Prize in combination with the MFI in 2006. The Forum will bring together leaders from microfinance and other fields for five panel discussions in search of successful strategies for addressing some of the world’s pressing challenges, including poverty, access to education and global health.

The Georgetown Global Forum will be sponsored by Georgetown University and pharmaceutical company Eli Lilly and Company. An event schedule and a list of panelists is provided below. For a more thorough schedule of events and list of panelists, please refer to this link. Online registration for the Forum is closed, however it will be streamed live online via this link. More information on the event can be found at the Georgetown Global Forum homepage.

The schedule is as follows:

7:30 to 8:30 am – Registration and Continental Breakfast

8:30 to 9:00 am – Welcome Remarks

9:15 to 10:30 am – Panel 1: Wall Street Meets Unpaved Streets: The Global Impact of the Financial Crisis

10:30 to 10:45 am – Break

10:45 to 12:00 pm – Panel 2: Doing Well, Doing Good: New Corporate Paradigms

12:00 to 1:30 pm – Lunch and first Keynote Address: Muhammad Yunus

1:30 to 2:45 pm – Panel 3: Essential Building Blocks: The Case for Quality Education for All

2:50 to 4:05 pm – Panel 4: The Faith Factor: The Role of Faith-based Organizations in Global Development

4:05 to 4:15 pm – Break

4:15 to 5:30 pm – Panel 5: In With the New: New Ways for Non-Profits

6:00 to 7:00 pm – Closing Remarks and second Keynote Address: President Bill Clinton

Panelists will include the following:

- José María Aznar, Former President of Spain

- Matthew Bishop, Chief Business Writer and Editor, The Economist

- Congressman Joseph Crowley, U.S. Representative, New York’s 7th District; Member, House Ways and Means Committee

- Mary Erdoes, Chief Executive Officer of Global Wealth Management, JPMorgan

- Andrew Ross Sorkin, Columnist, The New York Times

- Ray Chambers, UN Secretary-General’s Special Envoy for Malaria; Founding Chair, Points of Light Institute

- Chuck Dages, Executive Vice President, Emerging Technology, Warner Bros. Home Entertainment Group

- Richard Edelman, President and Chief Executive Officer, Daniel J. Edelman, Inc.

- Karen P. Tandy, Senior Vice President, Public Affairs and Communications, Motorola

- Desiree G. Filippone, Director, International Government Affairs, Eli Lilly and Company

- Reverend John Foley, Founder and Executive Chairman, The Cristo Rey Network

- Congressman Rush Holt, U.S. Representative, New Jersey’s 12th District

- Greg Mortenson, Co-Founder and Executive Director, Central Asia Institute

- Dina Habib Powell, Managing Director and Global Head of Corporate Engagement, Goldman Sachs

- Wendy Kopp, Chief Executive Officer and Founder, Teach For America

- Ann Veneman, Executive Director, UNICEF

- Reverend David Beckmann, President and Chief Executive Officer, Bread for the World

- Cardinal Theodore E. McCarrick, Archbishop Emeritus of Washington, D.C.

- Edward W. Scott, Jr., Founder and Chairman, Center for Interfaith Action on Global Poverty

- Reverend Larry Snyder, President, Catholic Charities USA

- Bill Drayton, Founder and Chief Executive Officer, Ashoka

- Jesse Dylan, American film, television, and music video director

- Sam Worthington, President and Chief Executive Officer, InterAction

- Charles MacCormack, President and CEO, Save the Children/US

By Ryan Hogarth, Research Assistant

Additional Resources:

Georgetown Global Forum: Homepage

Georgetown Global Forum: Program

Georgetown Global Forum: Live Feed

In Bangladesh alone, BRAC’s microfinance operations loaned more than USD 1 billion in 2008 to 6.4 million borrowers. However, Ian Smillie attributes the success of BRAC to its treatment of microfinance as an integral part of a larger multidimensional development strategy, and its provision of other services to the poor beyond credit: “Four million children, 70 percent of them girls, have graduated from BRAC’s 68 thousand primary and preprimary schools. Millions benefit from the work of BRAC’s health centers, its diagnostic laboratories, its health workers, and the 70 thousand community health volunteers who have joined the effort” (p2). Mr. Smillie also praises the fact that eighty percent of BRAC’s operations are self-financed. For more information on BRAC, please refer to its homepage and to its profile on the MIX Market, the microfinance information clearinghouse.

Author Ian Smillie worked alongside BRAC in Bangladesh, as a development worker for international nonprofit CARE in 1972 and 1973. He later went on to found Canadian development organization, Inter Pares, and was the Executive Director of Canadian University Services Overseas (CUSO) from 1979 to 1983. He served as an adjunct professor at Tulane University in New Orleans from 1998 to 2001 and on a United Nations Security Council expert panel in 2000 that explored the relationship between the illicit weapons trade and the diamond industry in Sierra Leone. Currently, Mr. Smillie serves as Research Coordinator on Partnership Africa Canada’s “Diamonds and Human Security Project”, and as an NGO participant in the intergovernmental diamond certification process, the Kimberly Accord. Ian Smillie has authored several books on international development including “Patronage or Partnership: Local Capacity Building in Humanitarian Crises” (Kumarian, 2001), “Managing for Change: Leadership, Management, and Strategy in Asian NGOs” (with John Hailey, Earthscan, 2001), and “The Charity of Nations: Humanitarian Actions in a Calculating World” (with Larry Minear, Kumarian, 2004).

For more information on “Freedom From Want”, please refer to this link. The book can be purchased online from Amazon.com for USD 16.47 plus shipping and handling.

By Ryan Hogarth, Research Assistant

Additional Resources:

Amazon.com: “Freedom From Want”

Bangladesh Rural Advancement Committee: Home

BRAC: “New BRAC Book Published: ‘Freedom From Want’”

MIX Market: Profile for BRAC

April 27 to May 9, 2009, Ghana Institute of Management and Public Administration, Accra, Ghana

Southern New Hampshire University’s Microenterprise and Development Institute (MDI) will collaborate with the Ghana Microfinance Institutions Network (GHAMFIN) to offer a two-week practitioner-focused training program at the Ghana Institute of Management and Public Administration located eight miles north of Accra, Ghana, between April 27 and May 9, 2009. Courses will be offered in the following knowledge tracks: Risk Management; Microfinance Policy, Transformation and Regulatory Issues; Community Managed Microfinance; Investment Readiness; and Current Microfinance Issues. Courses will be taught be experience practitioners and trainers in the field. Please refer to this link for course descriptions, and this link for faculty bios. Activities will include field trips to MFIs and other market development programs; evening guest speakers on savings led microfinance, rural banking and community economic development; and panel discussions on savings led microfinance and government role in microfinance. The course is designed for Microenterprise Managers, Executive Directors, Program Directors, NGO managers and CEOs, Financial Managers, Operations Managers, government staff and regulators, MFI board members and donors, consultants, and newcomers to the field.

Registration ends April 17, 2009, and costs USD 1300 for one week of courses and USD 2500 for two weeks. Full payment or a deposit of USD 500 must be made within 10 days to confirm registration. Payment can be made via check, wire transfer, or credit card. For more information on discounted rates for multiple enrollments, optional academic credit, and to register, please see this link. Registration fee covers books, reading materials, compact disks, and field trips. It does not include accommodation, airport transportation, and visa expenses. For information on accommodation packages, please refer to this link. For information on obtaining a Ghanaian visa, refer to this link. For any other inquiries please contact MDI by email at mdi@snhu.edu or by phone at (00)1.603.644.3124.

Additional Resources:

Ghana Microfinance Institutions Network: Home

Microenterprise and Development Institute: Home

MDI: MDI-Ghana

MDI: MDI-Ghana Accomodations

MDI: MDI-Ghana Course Descriptions

MDI: MDI-Ghana Enrollment and Costs

MDI: MDI-Ghana Faculty Bios

MDI: MDI-Ghana Visa Information

Southern New Hampshire University: Home