Paper
A Microfinance Training Simulation: Client Risk and HIV/AIDS and the Challenges of Mutual Guarantee-based Programs
Microfinance in high-risk environment: learning by doing
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34 pages
This paper identifies the situational uniqueness of MFIs operating in a high prevalence HIV environment. The paper presents a simulation test to reorient thinking on the difference made by high HIV prevalence in risk and cost sharing mechanisms by MFI clients.
The paper argues that:
- Risk sharing, especially when HIV prevalence is high, draws most heavily on the resources of the most economically able and active to cushion the events in the lives of the most vulnerable;
- HIV introduces a very high level of uncertainty, which is not estimated by MFI clients leading to the collapse of the group structure eventually.
The paper provides a detailed guideline for conducting the simulation exercise and lists the following stages to be followed by the facilitator for the simulation:
- Understanding the structure and purpose of the simulation;
- Explaining the simulation to all the participants;
- Guiding the discussions during the simulation;
- Sharing the learning with all the participants.
The paper also provides information on the physical requirements for conducting the simulation.
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