Building Better Lives: Sustainable Integration of Microfinance with Education in Health, Family Planning and HIV/AIDS Prevention for the Poorest Entrepreneurs

Publication Date: Aug 2001
Published by: The Microcredit Summit Campaign (MCS)
Document Type: Paper

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Opportunities and challenges for unified or parallel delivery of microfinance and education services

Given that very poor clients need more than microfinance to address the causes and conditions of their poverty, the question is how to ensure a coordinated combination of appropriate services, especially in rural communities where multiple services are simply unavailable. Most microfinance institutions prefer to focus on the financial needs of their clients, but group-based microfinance affords a good opportunity to provide low-cost education services needed by the poor, if only to improve their performance as microfinance clients.

This paper supplies diverse examples of microfinance institutions that have responded successfully to the challenge of integrating microfinance with education, through either parallel or unified delivery of services, without compromising the sustainability of their microfinance and overall operations. (Special attention is given to integration of microfinance with health education for very poor women, including promotion of family planning and HIV/AIDS prevention and care.) The paper states that each delivery system has its advantages-especially the potential range of services for parallel delivery and potential financial sustainability for unified delivery-and its disadvantages-especially the financing and coordination challenges for parallel delivery and the management and staffing challenges for unified delivery. The appropriate choice depends on local options for providing diverse services and the institutional will to provide more than microfinance.

[Abstract]