My colleagues and I often say or write that "microfinance alone is not enough." Others counter that microfinance, by helping the poor do microbusiness to get more income and assets, must surely be a wonderful way to give a boost up a rung or two of the ladder out of poverty. Yes, it is a wonderful boost, but consider how easy it is slip and fall off the ladder back into the depths of poverty. Take just one problem other than lack of money which is faced by the poor (by all of us, in fact) � ill health. It is a major cause as well as effect of poverty. In the 2002 World Bank study, Dying for Change, illness was the most commonly cited reason for "a downward slide into poverty... ahead of losing a job, which took second place. The poor are more likely to be exposed to health risks because their work is physically demanding and often dangerous. But they are least likely to be able to afford health care when they are injured or fall ill."

"In the 2002 World Bank study, Dying for Change, illness was the most commonly cited reason for "a downward slide into poverty".

Poor people often have no choice but to spend what little they have when injury or illness strikes. In a study conducted in Kenya, it was found that households in the bottom 20% of the socioeconomic scale spent more than 10% of their total expenditures on acute illnesses and that about 30% of households faced "potentially catastrophic cost burdens" as a result of illness. In research conducted by Freedom from Hunger in Bnin and Burkina Faso in 2006, it was found that poor microfinance clients spent an average of 30% of their annual income to combat malaria alone. And according to another study in Thailand, 35% of households experiencing an AIDS-related death "felt a serious impact on agricultural production, leading to a 48% reduction in family income." Ill health leads to lost productivity, which leads in turn to reduced earnings with which to prevent and treat illness.

How can we deal with poverty without dealing with ill health? How can we add value to microfinance by also addressing the health risks and actual illnesses of microfinance clients?

While microfinance is not a development panacea, it does more than provide loans and other financial services; microfinance institutions create service delivery channels to millions of poor people, especially women, often extending to isolated, hard-to-reach places. What is more, these service delivery channels can be financially self-sustaining providing demanded services at affordable prices that cover the institution's costs to maintain these channels. Microfinance clients repay their loans at astonishingly high rates, and their loyalty to and trust in the institution tend to be very strong. Many microfinance institutions provide financial services to groups of clients, who mutually guarantee each other's loans. These groups meet frequently to make loan repayments and deposit savings with the guidance of microfinance field staff. Such regular meetings offer excellent opportunities for the provision of add-on services, such as training in health or financial management. This combination of a vast and rapidly growing network of distribution channels to hard-to-reach, loyal, economically active groups of poor people, a steady revenue flow from interest earnings, and the drive to develop market-based products that pay for themselves makes microfinance an attractive core component of an anti-poverty program.

"Microfinance clients repay their loans at astonishingly high rates, and their loyalty to and trust in the institution tend to be very strong."

Recognizing the vicious cycle of poverty and ill health, and witnessing its impact on clients' ability to repay, flourish, build assets, and pull themselves out of poverty, some microfinance institutions have added nonfinancial services, often instructed, assisted, or just inspired by Freedom from Hunger. Our specialty for years has been showing other organizations how to offer microfinance combined with dialogue-based education to groups of women living in poor, rural communities. Recently, we decided to go a step or two further, with the financial backing of the Bill and Melinda Gates Foundation and now other donors, to enable microfinance institutions to offer their clients access to health products and care providers, to impressive effect. This illustration below shows a range of health-related needs, as expressed by poor women in developing countries, and the complementary products and services that microfinance institutions can offer in response, alongside microfinance services.

Health education
Equipped with more income and decision-making authority, microfinance clients have choices often for the first time in their lives. As a result, coupling microfinance with behavior-change education can be especially powerful. Many MFIs are offering training in topics such as the prevention and treatment of diarrhea, malaria, and HIV/AIDS; breastfeeding; rational use of local health services; as well as self-esteem, microenterprise management, and financial planning. The combination of greater knowledge of sound health practices and the increased income to act on that knowledge leads to dynamic, positive change.

Health financing and insurance
Some organizations such as R'seau des Caisses Populaires in Burkina Faso are going beyond Credit with Education to deliver health financing mechanisms, such as dedicated health savings accounts and emergency health loans. Health microinsurance takes this solution a step further. In Rwanda and the Philippines, enrollment in microinsurance programs is becoming easier, thanks to the availability of loans from MFIs to spread annual premium payments over time.

Links to health care providers
Rather than develop expertise in health care, MFIs can leverage their local influence and business acumen to create reliable linkages with providers, negotiate rates, and advocate for better quality and accessibility of health care. The largest MFI in the Philippines, CARD, has negotiated exclusive discounts for its clients with private providers in rural areas to increase access to more affordable primary care. The Bolivian MFI, CRECER, contracts with doctors who travel to isolated areas to conduct "health days" during which general check-ups, blood-pressure testing, Pap smears, and other essential services are offered en masse. In Cambodia, the MFI-run GRET-SKY health insurance project uses its leverage to improve the quality of care in public facilities and helps channel poor people away from inappropriate and expensive care delivered by private (often traditional) providers and toward local public health centers. Such provider linkages also help to sustain local medical services, thereby leading to broader community development outcomes.

Access to health products
Increased financial resources and knowledge about preventive health measures cannot help microfinance clients avoid malaria when insecticide-treated mosquito nets are not sold in their community, prevent HIV if condoms are not available, protect children from diarrhea when treatment tablets for contaminated water cannot be found, or buy the prescribed antibiotic when the supply is outdated, the quality of medicines sub-optimal, or the prices exorbitant. In response to such needs, BRAC in Bangladesh uses a network of health workers to sell essential but scarce health products door-to-door, and the fast-growing Indian MFI, Bandhan, is experimenting with a similar model. Some West African credit union networks have purchased insecticide-treated bednets and sold them at group meetings. The B'nin MFI, PADME, is developing a partnership with Population Services International to ensure that essential health products are distributed to shops in target communities and encourages its clients with suitable shops to offer such products. And I described one of Freedom from Hunger's programs, our HealthKeepers in Ghana, in the August 2008 edition of Uncommon Sense, an example of livelihood creation being paired with public health interventions that together overcome rural distribution and delivery challenges.

When my colleagues and I object that microfinance alone is not enough, we recognize the obligation to find and demonstrate ways to do more not just to bring in other institutions specializing in other valuable services, but to do more with the service delivery networks of the microfinance institutions themselves. A careful analysis of the local service gaps, consumer demands, institutional capabilities and business incentives allows for development of a package of non-financial services that can be provided directly by microfinance institutions or through strategic partnerships with other public or private organizations. Microfinance institutions are finding that doing more than microfinance can be both good for their clients and good business.