SPECIAL REPORT: Christoph Pausch on the European Microfinance Award 2021: Inclusive Finance and Health Care

MicroCapital: Why was “Inclusive Finance and Health Care” chosen as the topic of the European Microfinance Award 2021?

Christoph Pausch: As the past year has shown us all with such unfortunate clarity, health is everything. Being healthy allows education to play its role in opening new opportunities; it allows people to earn, invest and employ others; it keeps the economy growing and lets groups and societies prosper. And the opposite is true as well: without health – without health care to help people recover from serious health shocks and to stop minor health issues from becoming serious – it’s so hard for people to prosper.

This is especially true for the global poor – the financially excluded – who typically have volatile and precarious incomes and live in countries without high-quality universal health care. They not only need access to health care, but also the ability to pay for it. Too often this can mean taking on debt and selling income-generating assets or even their homes. For families in which the health shock prevents an income earner from working, the loss of assets to pay for treatment is magnified by the loss of income. This risks a negative feedback loop: poverty leads to bad health, which feeds into more poverty. People face barriers to access that are specific to their particular circumstances and needs, and some are exacerbated by a combination of low income and financial exclusion.

For these reasons, the topic of this year’s Award is Inclusive Finance and Health Care, and the framing of the topic reveals two things: that the focus will be not just on health, but care – driving access to the quality and affordable services we all (and especially low-income communities) need; and that both finance and health care can be inclusive – serving those who typically are underserved and excluded.

MC: What are some types of health care initiatives that organisations active in financial inclusion can offer?

CP: The financial inclusion sector can play an indispensable role in both helping households plan day-to-day medical spending and “smoothing” out health-related financial shocks. By encouraging savings, designing appropriate credit products and – perhaps most of all – facilitating access to insurance, financial services providers (FSPs) can direct their core expertise toward financial products that give low-income clients the financial flexibility required to meet their health care expenses.

Inclusive health care financing solutions are usually set up to provide medically necessary care or the money to pay for it when needed. They can also have features aimed at ensuring the quality and cost-effectiveness of care, bringing about behaviour change or supporting grassroots health care providers and/or workers. FSPs can offer health-specific financial products that go beyond generic microloans or savings accounts – from health insurance to emergency credit to vouchers and more. And then, beyond financial products, there is a whole range of non-financial services and value-added services – education and awareness campaigns, health camps, telemedicine and others – that can increase access to health care for those who most need it.

MC: What will the evaluation committees be looking for?

CP: The Award this year aims to highlight initiatives that facilitate access to quality and affordable health care for low-income communities. The committees that evaluate the applicants in this rigorous and multi-stage process will be looking for various characteristics, from innovation and replicability to impact measurement, client protection, outreach to underserved groups and the financial sustainability of the organisation as a whole. Particularly this year, partnerships will be so important. Very few – if any – financial institutions have either the capacity or the regulatory approval to provide health care directly. And the specialisation needed for health care delivery means that many programmes are designed to operate in partnership with a broad spectrum of stakeholders in the health care sector. So the application process will really look for how those partnerships work so that the expertise of different stakeholders adds genuine value to the programme.

MC: What types of organisations do you hope will apply for the Award this year?

CP: Because health care is not the primary focus of most microfinance institutions, this year it probably is harder to predict which organisations will apply compared to some other years – for example last year’s Award on Encouraging Effective and Inclusive Savings. In terms of eligibility, the requirements are as expansive as possible to ensure the field of applicants includes all the important initiatives that are underway. They have to be organisations that facilitate access to health care among low-income populations through financial inclusion. So this will include FSPs that directly provide, finance or otherwise facilitate access to health care, but also non-financial organisations that work with FSPs. Besides that, the usual requirements apply: that organisations have to be based and operate in an established list of countries; the products and services have been operational for at least a year; and the organisations can provide audited financial statements.

MC: What are the benefits to potential applicants of taking part in the Award?

CP: As before, there is a financial prize (100,000 euros to the winner and 10,000 euros to each of the two other finalists). And while this prize, generously provided by the Luxembourg Ministry of Foreign and European Affairs, is significant, we’ve seen over many years that the real benefit of the Award comes in the exposure that the 10 semi-finalists (and especially the three finalists) all get via international and industry press coverage; the European Microfinance Platform’s (e-MFP’s) annual publication, which profiles all the semi-finalists and extracts key factors for success; connections to e-MFP’s extensive network of stakeholders working all over the world; and donors, investors and various potential partners who pay attention to the outcome of this Award. And on top of that, e-MFP organises various events throughout the following year to further profile the initiatives involved in the Award.

Christoph Pausch is Executive Secretary of e-MFP. The €100,000 European Microfinance Award is jointly organised by the Luxembourg Ministry of Foreign and European Affairs, e-MFP and the Inclusive Finance Network Luxembourg. Applications for the European Microfinance Award opened on 15th March and close on 13th April at 23:59 CET. For more information and to apply, please visit http://www.european-microfinance-award.com.

This feature is the first part of a sponsored series on European Microfinance Week 2021, which will take place from November 17 through November 19. The event is held annually by e-MFP. MicroCapital has been engaged to promote and report on the conference each year since 2012.

Additional Resources

European Microfinance Platform (e-MFP) homepage
http://www.e-mfp.eu/

MicroCapital coverage of European Microfinance Week, including the European Microfinance Award
https://www.microcapital.org/category/european-microfinance-week/

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