MICROCAPITAL BRIEF: Freedom from Hunger Publishes Results of Four-year, Bill & Melinda Gates Foundation-funded Grant Program to Bring Combination of Microfinance and Healthcare Options to Rural Poor in Benin, Bolivia, Burkina Faso, India and the Philippines

Freedom from Hunger, a California-based international development nonprofit, recently published the results of a four-year grant program enabling the organization and partner microfinance banks to add healthcare options to microfinance offerings for 1.5 million of the world’s rural poor in Benin, Bolivia, Burkina Faso, India and the Philippines. The Bill & Melinda Gates Foundation, a Seattle-based private foundation, provided the USD 6 million grant for the Microfinance and Health Protection (MAHP) Initiative. The microfinance banks participating in MAHP were Bandhan of India, the Center for Agriculture and Rural Development (CARD) of the Philippines, Crédito con Educación Rural (CRECER) of Bolivia, Projet d’Appui au Développement des Microentreprises (PADME) of Bénin and Réseau des Caisses Populaires du Burkina (RCPB) of Burkina Faso [1].

According to Freedom from Hunger, the combined microfinance and health services offered by these five banks included “health savings, health loans, health insurance, health education, group discounts with health providers, mobile healthcare in rural villages, distribution of insecticide-treated mosquito nets, and more” [1]. Freedom from Hunger conducted research and evaluation for the duration of the project in order to qualify the impact of the offerings. Freedom from Hunger concluded that these health protection products can be offered “inexpensively” by some microfinance institutions (MFIs); “can differentiate an MFI in a crowded market, help attract new clients and enhance loyalty”; and “can carry a value for clients that exceeds the MFI’s cost of providing them, making for impressive net social value creation and contribution to social mission” [2].

Myka Reinsch, Special Advisor at Freedom from Hunger, sums up the results thusly: “Our experience has shown that well-established microfinance banks can offer valuable health-related options to their clients at low or no cost to the bank itself. In fact, our research results indicate that, in some cases, the resulting increase in client attraction and loyalty may lead to a net financial gain for the banks” [1].

To view Freedom from Hunger’s resources on microfinance and health, including the MAHP research paper, you may visit the following URL: http://www.ffhtechnical.org/resources/microfinance-health. To view Freedom from Hunger’s 12-minute video entitled “Healthy Microfinance: Innovations in Microfinance and Health Services”, you may visit the following URL: http://www.youtube.com/watch?v=zJ652vEa4Ko.

By Lindsey Shaughnessy, Research Associate

About Freedom from Hunger: Freedom from Hunger, first called “Meals for Millions”, is an international development nonprofit based in Davis, California.  Freedom from Hunger works with local partners to alleviate hunger and poverty in sixteen countries around the world. Its microfinance programs service approximately two million families worldwide. As of 2009, Freedom from Hunger reported total assets of USD 6.07 million.

About The Bill & Melinda Gates Foundation: The Bill & Melinda Gates Foundation provides grants to organizations within the United States and in more than 100 countries around the world with the aims of enhancing health care, reducing poverty and expanding educational opportunities and access to information technology. As of September 2009, the asset trust endowment totaled USD 34.2 billion. The Foundation has made commitments of USD 21.1 billion since its inception in 1994.

About Bandhan of India: Bandhan is a non-government organization that is registered with the Reserve Bank of India. Bandhan was established to address poverty alleviation and to empower women through microfinance. As of first quarter 2010, Bandhan reported to the to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 424 million, a gross loan portfolio of USD 265 million and 2,301,433 active borrowers.

About Crédito con Educación Rural (CRECER): Crédito con Educación Rural (CRECER) is a private nonprofit organization that provides credit services to women in Bolivia. CRECER’s Credit with Education product is based on the village banking methodology, where group members of a village savings and loans association (VSLA) informally pool, manage and loan capital to other group members. As of mid-year 2010, CRECER reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 55.2 million, a gross loan portfolio of USD 50 million, and 101,000 active borrowers.

About the Center for Agriculture and Rural Development (CARD): The Center for Agriculture and Rural Development (CARD) is a group of institutions, including a bank, that provides grants, lending, savings, training and consulting services. CARD aims to provide loans mainly to landless rural women. CARD launched the Landless People’s Development Fund in 1990 as its credit arm. As of year-end 2009, CARD reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 63.8 million, a gross loan portfolio of USD 46.2 million and 497,441 active borrowers.

About the Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME): The Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME), begun as the Projet d’Appui au Développement de Micro-Entreprises in 1993, is a nonprofit that operates in Benin. PADME aims to provide Beninois microentrepreneurs with capacity building grants and access to credit. As of year-end 2009, PADME reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 58.1 million, a gross loan portfolio of USD 36.4 million and 48,962 active borrowers.

About Réseau des Caisses Populaires du Burkina (RCPB) of Burkina Faso: Réseau des Caisses Populaires du Burkina (RCPB) is a Burkina Faso-based credit union and cooperative. RCPB offers loans, savings and funds transfer services to its members. As of year-end 2009, RCPB reported total assets of USD 223 million, a gross loan portfolio of USD 134 million and 112,166 active borrowers.

Sources and Additional Resources:

[1] Free Press Release, “Freedom from Hunger Shows How Banking and Healthcare Can Work Together for the World’s Poor”, August 30, 2010. http://www.prlog.org/10891583-freedom-from-hunger-shows-how-banking-and-healthcare-can-work-together-for-the-worlds-poor.html

Freedom from Hunger, “YouTube video: Healthy Microfinance: Innovations in Microfinance and Health Services”, April 6, 2010. http://www.youtube.com/watch?v=zJ652vEa4Ko

MicroCapital’s Microfinance Universe profile: Freedom from Hunger

MicroCapital’s Microfinance Universe profile: The Bill & Melinda Gates Foundation

MicroCapital’s Microfinance Universe profile: Bandhan

MicroCapital’s Microfinance Universe profile: Center for Agriculture and Rural Development (CARD) of the Philippines

MicroCapital’s Microfinance Universe profile: Crédito con Educación Rural (CRECER)

MicroCapital’s Microfinance Universe profile: Association pour la Promotion et l’ Appui au Développement de MicroEntreprises (PADME)

MicroCapital’s Microfinance Universe profile: Réseau des Caisses Populaires du Burkina (RCPB)

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