Literature review on microfinance in kenya

Microfinance being able to provide such financial services is being pursued by every economy worldwide. Initially microfinance aimed at providing donor finances and financing experimental projects. This has developed to financial institutions that provide a wide range of services and several routes to opportunities that are significant for economic development and expansion Khan, The concept of microfinance in most instances has been used interchangeably with microcredit imploring that they have the same meaning.

However microcredit and microfinance are two different concepts. This definition indicates that microcredit is part of microfinance since it involves providing credit to the poor. Microfinance is an overall concept as it involves both credit and non-credit financial services such as insurance, savings, pensions and other payment services.

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The most commonly identified models of operations. Show More. Read More. While meeting this challenge is a clear priority for policy makers and donors, it is also a major profit opportunity for commercial players who can solve market failures and create real value. Personal savings, insurance, credit, cash transfers from family and friends and other financing mechanisms offer promising opportunities to create security and steady employment but they require a nuanced understanding of product design and the local market conditions in order to be effective.

We recently conducted a literature review of rigorous academic studies of financial service innovations among the very poor to find out what services and products would unlock the most value for those at the bottom of the pyramid. Savings accounts are effective safety nets—especially if they apply insights from behavioral sciences. However, while replication studies in Uganda, Malawi, and Chile also found that removing account opening costs increased savings, this was partially offset by a reduction in informal savings and there were no observed impacts on business investment or income.

In Nepal, offering female-headed households a no-fee basic account with deposit collection service i. Households responded better to health shocks and spent 20 percent more on education and 15 percent more on meat and fish. Often, the beneficial impacts of savings accounts can be enhanced by features that help people overcome behavioral biases by, for instance, fortifying willpower.

Micro-insurance is not at scale anywhere except when heavily subsidized by government, a market we hope technology may change in the future. Digital financial services let people help each other. During these hard times, users were more likely to receive domestic remittances—more money from a larger number of people. The drivers of organizational strategy are related to the context, health needs of the clients, and individual capacities of MFIs to develop effective services.

Literature Review Microsavings: Publications: FSA

However, approaches to establishing these processes and decision-making for effectively structuring and delivering health and microfinance services is an inadequately explored area. Future progress depends on bridging public health, microfinance, and organizational research silos to study how different organizational arrangements affect implementation and outcomes. The expansive reach of microfinance to more than million households globally through more than 3, MFIs 1 makes it a large-scale platform to reach the poorest of households across the globe with basic health and social services.

Implemented in its full form, microfinance institutions typically include financial and credit services but have increasingly expanded their services to include health education, health care, health insurance, education and linkages to other services 2. To carry out their expanded scope, MFIs are part of a growing trend of multi-organizational and cross-sectoral partnerships to address complex social and health problems that exceed the management and implementation ability of any one organization 3.

The purpose of our review is to apply a new organizational arrangements framework to analyze the methods that have been utilized for implementing specific types of health services and products. While recent reviews have summarized the relationship of health programs linked to income generation in poor communities, on a number of diverse health behaviors and outcomes, the organizational arrangements have not received much attention.

However, these results are limited and depend on the type of program, sustainability of MFIs and contextual conditions 5. Additionally, the mechanisms linking microfinance to improved health remain largely unknown due to lack of specific descriptions and analysis 6 and the processes underlying organizational arrangements that contribute to these outcomes have not been examined. Public health studies are typically focused on outcomes with few details of the organizational structures and processes while organizational studies provide theoretical frameworks and strategy formulation but do not correlate these findings with outcomes 9.

Effective implementation will require a thorough understanding of the organizational strategies and arrangements and the relationship to outcomes. Our review begins to fill this gap by applying an organizational arrangement framework to existing studies to identify the range of integrated and partnership approaches to implementing multi-sectoral services. Our aim is to contribute to a better understanding of the types of organizational strategies that may guide the future designs for scaling-up microfinance and health-related services.

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Future progress can be made by bridging public health, microfinance, and organizational research silos to develop standard terminology, frameworks, and methods for studying how different organizational arrangements affect implementation and outcomes to inform program development.

We reviewed the published literature in English using online PubMed, Science Direct, and Popline databases from the year to Our focus was to review the published research containing strategies that have been rigorously evaluated and therefore providing evidence-based recommendations for organizing health programs in microfinance institutions. We included studies that focused on access and delivery of different health programs with microfinance and explicitly described the intervention, were full-text articles based on original research and published in peer-reviewed journals.

Studies that focused on health outcomes of microfinance as a stand-alone intervention or dealt with microfinance as an intervention tool in existing health programs were excluded. Articles that explicitly described the institutional arrangements and processes of providing direct services or forms of linked health services and products through microfinance organizations and partnerships were used in the final analysis Figure 1.

We categorized the articles by modifying three approaches used in earlier reviews — based on institutional arrangement, health theme, and health service type 2 , 7 , 10 , We maintained the health theme and health services components but reformulated the institutional arrangements to further clarify the organizational mechanisms for enabling a multidimensional approach to poverty alleviation through the provision of health and financial services.

As the source for the primary synthesis of the articles, we teased out the institutional arrangements to classify the articles into the following approaches: integration and partnerships. In streamlining the terminology used by multiple disciplines, we define integration as when an MFI delivers both financial and health services or benefits directly through its own organization. This may exist when the MFI develops more internal skills and resources that may include health education and other products and services related to improving health or other related outcomes.

A partnership exists when an MFI agrees to work with one or more organizations, such as government, NGO, or private providers for a specific purpose such as to enable access to health programs or health-related products or services. The basic cooperative model applies when each partner remains autonomous in budgeting, staffing, and decision-making. In a collaborative model, there is more sharing of resources, decision-making, and accountability.

An integrated model of partnership is when there is mixing of resources and a surrender of individual autonomy to a new entity for decision-making We adapt the types of partnership models identified by our literature review, to create a unidirectional continuum of organizational arrangements that range from no partnership to complete merger or unification of the MFI and health-related organization. The partnership continuum is adapted from the partnership toolkit developed by the Collaboration Roundtable 12 and modified to accommodate the categories of organizational arrangements for MFI-Health programs, used in this review Figure 2.

The MFI may decide to diversify its portfolio and take on the role of a health organization or partner with an external health organization to support its health initiatives. Depending on the approach, the organizational arrangements for delivery of microfinance-health programs may fall anywhere on a continuum from no partnership to complete merger or unification of MFI and health organizations.

Research proposal on impacts of microfinance in Kenya

Theoretically, or in the long run, the integration-partnership continuum of organizational arrangements between an MFI and health organization can be bi-directional. An MFI may initially enter a cooperative or collaborative partnership with a health organization and eventually integrate the health program delivery into its institutional profile and function autonomously. For the sake of clarity and alignment with the main purpose of the paper to review and classify the organizational arrangement employed by MFI-health interventions, we keep this integration-partnership continuum as unidirectional.

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It is based on degrees of partnership ranging from no partnership to complete merger. To provide further clarity for our review, the different categories of organizational arrangements have been defined in Table 1.

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The conceptual framework for the review captures the structural and functional aspects of designing MFI-health combined programs and show how they are driven by contextual factors affecting the institutional arrangements, health services and products, and outcomes Figure 3. Health needs of the population served by the MFI, capacity of the microfinance institution to deliver a health program and an enabling environment for the MFI to form and sustain partnerships with public and private sector health institutions are the key contextual factors influencing the design of MFI-health programs.

These factors are influential in deciding the type, scalability, and replicability of MFI-health interventions. At the same time, individual capacities of the MFIs influence the complexity and scale of the interventions. MFIs with poor capacities may limit their interventions to health education while strong MFIs expand their health services to include higher functions like providing health care, promoting health products, and financing health care.

The capacity of the MFI along with the opportunity and availability of health organizations to join in partnership, and the scale and complexity of the health services or products, plays a role in deciding the type of institutional strategies. They can range from integration MFI integrates health function in its services with no partnership with a health organization to cooperative, collaborative or unified partnerships. Cross-sectoral interventions involving MFIs and public and private sector health institutions have the potential to impact health knowledge and behavioral outcomes, increase coverage and quality of health services, complement financing of healthcare among the poor and vulnerable population with a high burden of ill-health and thus improve the efficiency of the health sector.

The individual articles included in our review are synthesized using a framework that teases out organizational arrangements for delivery of the interventions to classify them as — Integrated, or Partnerships. We present the articles along with their health themes and services, but the focus is on understanding the organizational arrangement used for microfinance-health combined services. An analytical look at these organizational arrangements provides insights on the choice of organization strategy used by the MFI based on their context — setting, client health needs, the scale of operations and financial sustainability.

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The challenges and enabling factors for the MFI-Health organization briefly mentioned in the discussion section of some articles, provide valuable insights for deciding on the appropriateness, feasibility, scalability, and replicability of the MFI-Health interventions in other settings. These challenges, as well as enabling factors, are discussed separately after the findings section.

We summarize the articles Table 2 and further present individual studies, classified along the integration-partnership continuum of MFI-health combined interventions. Please refer to the online supplementary Table S1 in Online Supplementary Document for complete details of these articles. As detailed in the methods section we define integrated institutional arrangements when an MFI delivers the health service or benefit directly through its own organization.

We could not find any study with a pure integrated approach where the MFI did not partner or link with an external organization. Though in practice, MFIs that deliver informal health education through group meetings may do so with an integrated approach without any external support.

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Some large microfinance institutions such as Grameen Bank in Bangladesh and Pro Mujer in Latin America have used a hybrid approach of integration with a cooperative component to successfully deliver clinical services alongside microfinance activities, though the services were restricted to health screenings, and basic health services. They incorporated a cooperative partnership arrangement with external health providers for referrals to higher levels of care.


The Grameen Bank implemented a Micro Health Insurance MHI scheme to provide healthcare directly to their clients by establishing health centers along with paying for their coverage. The bank sold an annually renewable prepaid insurance card to the poor, both members and non-members of the MFI with the delivery of curative services at reduced medical consultation fees, discounts on drugs and test, hospitalization benefits, and free annual health checkup and immunization The universal screening program included free health screenings body mass index, blood pressure, clinical breast examination, and blood sugar level but Pap smears were provided at nominal cost.

A unique feature of this intervention was co-location of health education and clinical services along with mobile clinics for remote areas. Health education was provided by trained credit officers. The cost of these services was covered by interest charged on microfinance loans MFIs often engaged in cooperative partnerships with health-specific organizations for the development of training curriculums for health education, training of trainers, linking with national health programs, referrals to external healthcare providers and organizing health camps in MFI areas.

Under a cooperative partnership, MFIs utilize the expertise of health organizations for a one-time activity such as training of credit officers or for a specific component of the MFI-Health intervention such as referral for higher levels of care. In Mongolia, an HIV and sexual risk reduction curriculum was successfully delivered alongside a savings-led microfinance program among sex workers leading to a reduction in unprotected vaginal sex and a reduction in the number of paying partners. A unique intervention in Egypt enhanced safety for children working in small businesses funded by microfinance loans by providing training on workplace safety for children, hazard assessment and mitigation training to loan officers.

Business owners committed investments in child occupational health and safety through an inbuilt loan disbursement mechanism by increasing the loan amount. The intervention was originally developed as a cooperation between loan officers, microenterprise owners, and working children, but allows loan officers to withhold future loans if business owners fail to deliver on agreed improvements for working children MFIs in Bolivia, Burkina Faso, and Benin offered health loans, health savings account, and health loans linked to savings accounts to their clients providing protection from financial risk for health care costs.

These loans were charged at the lower interest rate, had flexible and longer repayment periods, and in some cases were paid directly to health providers to ensure their use for a health purpose. In India, voluntary health workers were nominated by two SHGs to raise awareness on maternal and child health issues, hygiene and sanitation. Microloans were provided for constructing toilets, and health insurance was provided by the MFI.

The health services were delivered through mobile and stationary health camps, organized by MFI for promoting these services along with referrals to external health providers in case of danger signs of pregnancy or child health complications. SHG women receiving the health program had higher odds of delivering their babies in an institution, feeding colostrum to their newborn, and having a toilet at home. No statistically significant reduction in diarrhea among children was found. There was also no decrease in out of pocket health expenditure even with health insurance provided Most studies fall into this category, though the level of collaboration may vary.

In South Africa, a participatory learning and action curriculum called Sisters-For-Life SFL was integrated into loan meetings and delivered through a separate training team. The intervention also involved a phase of wider community mobilization through partnerships with local institutions along with the establishment of committees targeted at intimate partner violence such as crime and rape.