Poverty and ill-health are, indeed two sides of the same coin. It’s a vicious cycle where in order to alleviate poverty, effective healthcare system has to be provided to the poor families. In fact, if we consider multiple studies conducted in the past, they all reveal that when families from the 'vulnerable sections of the society' struggle to pay for their illness and healthcare, they are likely to fall into the never-ending trap of poverty. This coupled with the lack of basic health infrastructure in rural and remote areas aggravate the health conditions of the poor, leaving them in a perpetual state of poverty.
Over the years, the microfinance industry in India has proven to be one of the few poverty alleviation strategies that has helped poor individuals improve their household economic situation by allowing them to save and borrow specifically for health care needs because right from cardiovascular diseases to cancer and diabetes, the poorest populations are affected by chronic health ailments too.
According to the Economic Times Report on August 30, 2018, MBFC microfinance institutions posted more than 50 percent growth in gross loan portfolio at Rs 51,878 crore in the first quarter of FY19 in India compared to the same period of last year. In terms of geographic categorization, 66 percent of the portfolio for NBFC-MFIs is rural and 34 percent is urban. These numbers demonstrate the fundamental strength of the industry and its untapped potential.
And, now with more commercial banks turning receptive to the needs of the medium and small MFIs which is also backed by a strong regulatory framework, the once unorganised MFI sector is now expected to contribute largely for the health of poor.
Born out of the simple notion that the poor can save and are bankable, microfinance is basically the distribution of small loans to help the impoverished who otherwise do not have access to loans, to engage in a variety of economic activities. And, if we go by previous track records, microfinance to some extent has been successful in reaching the economically poor strata and helping them fight their healthcare woes including financing their medicine in few cases and protecting them from the risk of healthcare shocks.
Banking on its success, scores of microfinance institutions (MFIs), and self-help promoting institutions (SHPIs) promoted by the state governments, non-governmental organisations (NGOs) and a few Regional Rural Banks are coming forward to educate their clients and members on a wide range of health topics, from child and maternal health to prevention and management of diseases such as malaria, HIV/ AIDS and diabetes. Intention should be to spread awareness about health and nutrition because funding alone is not the solution.