Microfinance continues to play an important role in ensuring that relevant and affordable financial services are extended to low income households who have limited access to services offered by ‘traditional’/conventional financial institutions.Whereas there is no evidence of direct link between HIV&AIDS and poverty, it is very clear poverty increases ones susceptibility to HIV infection and vulnerability to the negative impact of HIV and AIDS.
According to the Uganda government, the effects of HIV and AIDS have proved to be one of the biggest obstacles for the government to achieve its goals of the Poverty Eradication Action Plan and inevitably, and the millennium development goals. It is estimated that 130,000 new infections occur each year with 72,000 AIDS-related deaths per year.
The National Strategic Plan has emphasized the need for all actors everywhere to make a contribution in their spheres of influence as individuals, organizations or communities, to respond to HIV/AIDS as a major development issue.
The microfinance industry is one of the potential strategies in HIV&AIDS prevention and care and support programs to help stabilize households affected by HIV and AIDS as well as creating a forum favorable to disseminate HIV prevention information and forming a model of psychosocial support group to the members.
Whereas the microfinance industry provides support to the poor, including those living with HIV, the institutions themselves are not immune from the challenges paused by HIV. According to the MSC survey, 75% of MFIs in Africa reported that HIV and AIDS had a substantial impact on their program and clients. Common impacts reported include staff absenteeism due to emergency medical obligations, low morale among staff, increased delinquency and default, increased client-drop outs, and a greater burden of caring for dependents. This poses a challenge to microfinance institutions to try and build resilience to the negative consequences of HIV and AIDS and yet adequately respond to the needs of all their clients including those who may be HIV positive.
The microfinance industry in Uganda has attempted to embrace the concept of health integration into their activities to keep a healthy clientele by having HIV&AIDS prevention awareness Campaigns and by developing HIV&/AIDS work place policies and making partnership with health insurance companies to maintain a healthy workforce. However, these strategies are limited to a few MFIs, and therefore leaving big room for improvement.
AMFIU in collaboration with HIVOS and STOP AIDS NOW!, piloted an HIV programme in 6 Microfinance institutions to explore critical factors for integrating microfinance into institutional responses for reducing the vulnerability of PLHIV within their communities. The pilot was a first step of a longer trajectory for setting up coalitions of MFIs and AIDS Support Organisations (ASOs), developing subsequent scaling up plans, promoting AIDS awareness among microfinance beneficiaries, building HIV/AIDS competence of microfinance institutions and informing STOP AIDS NOW! partners and other actors on the prospects of strategically aligning microfinance in generalised AIDS epidemics. This built the foundation upon which this programme continues to run.
Key recent results
- ASOs, MFIs and PLHIV networks collaborate in complementary targeting of vulnerable groups
- Building AIDS competence of Microfinance Organisations to reduce stigma and leverage innovative lending products
- Formal ,accountability-based collaboration of networks of PLHIV, MFIs and ASOs exists
- Understanding the congruence between goals of ASOs, Microfinance Institutions and PLHIV networks in addressing poverty within the context of HIV/AIDS.
- Readiness of associations and networks of PLHIV to engage with social protection systems.