Linking health to microfinance to reduce poverty

Abstract

At the forefront of global health priorities are the achievement of the United Nations’ Millennium Development Goals (MDGs) and the strengthening of health systems. The MDGs focus the worldwide development agenda on reducing extreme poverty as well as improving health, education and human rights by 2015. At the same time, the World Health Organization is emphasizing the need to build health-system capacity, a global challenge that is most elusive in rural and resource-poor environments. Meeting global health needs calls for more intersectoral approaches. One that holds real promise, though largely underutilized, is the linking of microfinance with appropriate health-related services. Numerous impact evaluation studies support the effectiveness of microfinance and its impact on poverty. Research funded by The World Bank examined the impact of three microfinance institutions in Bangladesh over a seven-year period and found dramatic decreases in overall poverty, with the highest impact on those families in extreme poverty.1 However, microfinance is not a silver bullet; legitimate issues exist, such as the ability to address the needs of extremely poor people, the level of debt burden for individuals, and the uneven performance of microfinance institutions worldwide.

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