Costs and Benefits of Microfinance Institutions Offering Health Protection Services to Clients

Abstract

Five microfinance institutions (MFIs) in Bénin, Bolivia, Burkina Faso, India and the Philippines developed and offered health protection services to microfinance clients: health education, health loans, health savings, health micro-insurance, linkages to health providers and distribution of health products.  After about two years, the services were collectively reaching over 300,000 clients and are continuing to scale up.  The cost to the MFI was generally low for each service (average annual net marginal cost of US$.29 per client and average total annual cost, including allocated expenses, of $1.59 per client).  Some were expected to become profitable in the near term.  In addition to the financial cost of offering such services and who bears the cost, we discuss the broader benefits both to clients and the MFIs themselves and suggest that more MFIs around the world could find similar cost-effective ways to deliver health protection services to their clients.