Expert Meeting on Microfinance and HIV/AIDS

This is a report on the expert meeting on microfinance and HIV/AIDS. The objective of the workshop was to share experiences between MFIs, financial corporations, donor organizations and HIV/AIDS organizations on effective strategies for coordinated efforts to address the consequences of the HIV/AIDS pandemic.

The paper states that the crisis has the following effects on MFI clients and staff:

• High client dropout and absenteeism, increasing the MFIs costs in maintaining and expanding client base;
• Diversion of funds and time from the business, leading to reduced repayment capacities;
• High staff absenteeism;
• Increased cost of recruitment and training of new staff.

The dilemmas that MFIs face regarding this situation are:

• Many MFIs feel that HIV/AIDS is the responsibility of the government;
• The MFI methodology often excludes infected people;
• The disease threatens MFI viability. The costs of extra activities to mitigate the effects of the disease are high and there is the moral dilemma of whether these costs can be transferred to the clients.

The MFIs have taken up the following efforts and strategies for prevention and awareness among staff and clients:

• Educational programs, counseling, dispensing of medicines;
• Health insurance programs, in partnership with insurance companies, thereby minimizing administrative costs, while reducing lending risk and increasing client retention.

The paper recommends the following further actions:

• Partnerships between HIV/AIDS organizations, gender organizations, MFIs and insurance companies;
• Development of new products and adjustment of existing products, along with donor assistance, to help clients reduce their vulnerability;
• Active involvement of donors and the corporate sector.

The paper concludes with summaries of various presentations made in the workshop.