From Microfinance to Macro Change: Integrating Health Education and Microfinance to Empower Women and Reduce Poverty

Development priorities for governments, donors and practitioner agencies worldwide are guided by the Millennium Development Goals (MDGs)—a set of targets for reducing extreme poverty and extending universal rights by 2015. If the MDGs are achieved, it would represent enormous progress toward the United Nations Population Fund’s (UNFPA’s) vision that, worldwide, “every pregnancy is wanted, every birth is safe, every young person is free of HIV/AIDS, and every girl and woman is treated with dignity and respect.” As the Human Development Report 2005 (HDR 2005) warns, however, the promise of the MDGs will not be fulfilled if current trends continue. In fact, UN Secretary General Kofi Annan has said, “The Millennium Development Goals can be met by 2015— but only if all involved break with business as usual and dramatically accelerate and scale up action now.” The time has come for action. This document calls on development agencies, governments, microfinance institutions (MFIs), and donors to help realize the goal of health and equal opportunity for all by investing in strategies with proven impact on the problem of global poverty and poor health. It proposes one specific strategy that acknowledges the intimate relationship between poverty and poor health, and has proven impacts for very large numbers of the poor and very poor1. This proposed strategy is the combination of microfinance and reproductive health education. Dramatic findings are emerging on the macro level that support the importance of microfinance. A 14-year study by the World Bank of three MFIs in Bangladesh finds that 40 percent of the entire reduction of poverty in rural Bangladesh was directly attributable to microfinance2 . Juxtaposed with other countrywide data presented in the HDR 2005, this evidence is even more powerful. The HDR 2005 cites Bangladesh’s successes in human development by comparing it to India, a country with much higher income and economic growth, but lesser progress toward human development goals. It declares that, “Had India matched Bangladesh’s rate of reduction in child mortality over the past decade, 732,000 fewer children would die this year.” The HDR 2005 presents four strategies directly contributing to Bangladesh’s advances, including “expanded opportunities for employment and access to Microcredit.” Despite the impressive impacts of microfinance services on poverty, health, and empowerment, the development community realizes other services and strategies—besides credit—must be made available to create a web of support to help families lift themselves out of poverty. Two organizations in Bolivia, CRECER and Pro Mujer, are already successfully combining microfinance services with reproductive health education, while also reaching large numbers of poor clients and achieving financial self-sufficiency. Summaries of case studies on both institutions appear in the third section of this document. Many believe that microfinance could maximize its potential by integrating other complementary services within the infrastructure of the financial services. While others have taken the integration of microfinance and health education to profound levels within their own institutions, the U.S.- based non-governmental organization Freedom from Hunger has for years been leading the charge globally and, as a result, microfinance programs in many regions have successfully offered basic health information to clients along with financial services. If reproductive health education were to be integrated on a massive scale with microfinance services for the very poor worldwide, then the true potential of microfinance to empower women and offer a dignified route out of poverty could be realized. The final section of this document offers eight concrete recommendations for action to realize the potential of combined services. Inherent in all eight actions is the crucial role that development agencies, governments, MFIs and donors can play in supporting integrated reproductive health education and microfinance services, while also championing microfinance as one of the pillars for meeting the Millennium Development Goals.

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