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www.itcilo.org 1

International Training Centre

of the ILO

Turin, Italy

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HIV/AIDS and the World of

Work. Livelihood/ micro finance support

to People living with and affected by HIV and AIDS

Margarita Lalayan ITC ILO Senior Microfinance Specialist

By the end of the session, participants will have: • Defined microfinance • Explored its role in serving people with HIV/AIDS

• Learned (through a case-study) about various aspects of serving

people with HIV/AIDS

Making Microfinance Work 2.‹#› Managing for Improved Performance

What is Microfinance?

The provision of financial services to the poor population on a sustainable basis

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What is Microfinance ?

The provision of financial services to the un-

bankable on a sustainable basis

What is Microfinance

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Today…

Over the years, the discourse has shifted from “microcredit” to “microfinance,” and now widespread concern for “financial inclusion” is directing attention to the broader “financial ecosystem” and how to make financial markets work better for the poor. The NEW Microfinance Handbook

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The Promise of Microfinance

Microfinance • Credit • Savings • Insurance • Transfers

Increases • Income • Assets • Security • Confidence

in future

Better • Health • Education • Nutrition • Community

participation • Banking for

the majority

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Socio-economic Impact

Job creation Asset building Poverty

reduction Empowerment

Top photo by Adam Rogers for UNCDF; bottom 3 photos by Roahnna Mertens for ACCION

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Important links

CGAP: www.cgap.org

ITC ILO Microfinance training program: mmw.itcilo.org

ILO Social finance program: www.ilo.org/socialfinance

MIX Market www.mixmarket.org The SMART Campaign http://www.smartcampaign.org/ Social Performance Task Force: www.sptf.info Microfinance gateway: www.microfinancegateway.org

http://www.ilo.org/socialfinance

http://www.microfinancegateway.org/


Typology of Microfinance Service Providers

Formal Semiformal Informal • Commercial banks • Development banks • Savings banks • Non-bank financial

institutions • Finance companies • Leasing companies • Insurance companies

• NGOs • Credit unions • Savings and credit

cooperatives • Private companies /

institutional moneylenders

• Village banks • Self-help groups • FSAs, ROSCAs,

ASCAs • Burial societies • Pawn shops • Individual

moneylenders

3.10


A Starting Point

Before designing interventions for vulnerable market segments, it is important to answer one critical question:

How will access to financial services improve the lives of the targeted persons?


Savings product considerations

- Savings products can be designed to help build both productive assets (those that generate additional income, such as machines, livestock, and land) and cash reserves.

- Looking at flexible savings products that allow clients to access their money when it is needed may be important for HIV/AIDS-affected communities that have greater expenses for health care, nutrition or support of orphans.

- Providing products that help children who have lost their parents to AIDS is useful

- Ensuring that savings account holders indicate beneficiaries on account opening forms can also protect assets for children or other family members in case of death


Loan product considerations - Some HIV-positive people may need to change their livelihoods if

they become sick and try new opportunities.

- Helping clients transition to different activities during periods of illness or liquidate their business can be a way to protect the client.

- Considering loan products that help clients “re-start” or “bounce back” from illness and re-build their business can also be a means to address HIV/AIDS


Loan product considerations - Some institutions have offered “Credit with Education,”

- Microfinance service providers need to be sensitive to the needs of HIV/AIDS-affected households when collecting on loans that have fallen delinquent.

- Existing or potential clients should not be discriminated against on the basis of HIV status.


Insurance product considerations - One of the best ways financial service providers can assist clients

through crisis is to provide loan insurance in case of death, sometimes called credit life insurance.

- Beyond credit life, extending insurance services in general through private firms can also help with health care needs and disability due to HIV/AIDS


Partnerships - Prevention and nutrition information. - Peer educator training - Gender equity training - Voluntary counselling and testing - Health care - Business Development Services

Of course, partnerships bring their own challenges!


Take a Position

Read the statement below

If you agree with it, stand on the left side of the room

If you disagree with it, stand on the right side

“People with HIV/AIDS cannot be served with the same product mix and delivery channels as other clients. They require special treatment.”


The Argument for Exclusivity

Makes it possible to deliver the specialized services, support and attention that the group requires

Ensures that services do not “leak” to the non-vulnerable Avoids capture by elites Makes the most of limited resources Can narrow the inequality gap


The Argument for Integration

Serving vulnerable groups in isolation is more expensive, especially if members are dispersed

By serving as many people as possible within a particular geographic area, MFIs can spread their fixed costs over more customers

Setting vulnerable groups apart could perpetuate discrimination


Making a Decision

1. How large is the marginalized group?

2. Are its members relatively homogeneous?

3. Could members eventually move out of that segment and into another that is less vulnerable?

4. Are other stakeholders willing to subsidize the cost of specialized services for this segment?

5. Can integration reduce marginalization?

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Thank you!

Margarita Lalayan Senior Programme Officer (Microfinance) International Training Centre of the ILO Viale Maestri del Lavoro, 10, Turin, Italy tel. +39 011 693 6530 e-mail: [email protected]

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