Making the Link Between Poverty and Illness: Microfinance Takes on Healthcare in India

"The biggest enemy of health in the developing world is poverty." -- Kofi Annan

A fifth of all childhood deaths worldwide occur in India, where out-of-pocket healthcare spending is 80 percent among a population of which 76 percent—about 800 million people—live below the poverty line. Healthcare is a luxury for many Indians, even as they live in one of the world's fastest growing economies. Indeed, India suffers from a deplorably inequitable distribution of wealth and has a disproportionate number of adults at the bottom of the global wealth pyramid: Almost a third of the world's population owning less than USD 1,000 live there.

And if you're poor, not only are you more likely to get sick, but it will be more difficult to get well. "Globally, there is a stark relationship between poverty and poor health: in the least developed countries, life expectancy is just 49 years, and one in ten children do not reach their first birthday," according to the World Bank. "Poverty creates hunger, which in turn leaves people vulnerable to disease. Poverty denies people access to reliable health services and affordable medicines, and causes children to miss out on routine vaccinations."


But some help is on the way, thanks to a new initiative that aims to provide over 700,000 microfinance clients in the nation with health education and services, reaching an estimated 3.7 million family members over the next five years. The initiative was announced as part of a new strategic alliance between the Washington, D.C.-based Microcredit Summit Campaign, a project of the non-profit RESULTS Education Fund, and Freedom from Hunger, a non-profit international development organization based in Davis, California.

"Providing low cost ways for people living in poverty to maintain their own health and care for the health needs of other family members is an essential part of achieving our goal of seeing 100 million families move out of severe poverty," said Larry Reed, director of the Microfinance Summit Campaign.


The alliance is supported by a grant from Johnson & Johnson, which has committed to achieving the United Nations Millennium Development Goals (MDGs), particulary 4, 5 and 6, which address maternal and child health. As part of "Every Woman, Every Child," the United Nations' Global Strategy for Women's and Children's Health, which was launched in September, Johnson & Johnson, a multinational pharmaceutical corporation based in New Jersey, and the US Agency for International Development (USAID) created the Mobile Alliance for Maternal Action (MAMA). This initiative uses mobile phones to deliver pre- and post-natal health information to new and expectant mothers in the developing world. Over the next three years, the program will be rolled out in India, Bangladesh and South Africa.

Recognizing that "illness sometimes forces MFI clients to repurpose business loans for health and to borrow from more expensive sources to access cash for healthcare needs," the goal of this strategic alliance is to develop a healthcare platform that sees the connection between poverty and health, using the established framework of microfinance as a leaping point.


Considering India's spectacular economic growth and wealth creation (over the past decade, the nation's total wealth tripled to USD 3.5 trillion and is set to hit USD 6.4 trillion in the next four years), it is not spending nearly enough on the health of its population. Among the 193 member countries of the World Health Organization (WHO), India ranks a miserable 145th in health expenditure, spending less of a percentage of their GDP on health than some of the world's least developed countries, including Equatorial Guinea (79th), Bhutan (118th), Angola (130th), Djibouti (134th), Sudan (136th) and Yemen (139th). This new microfinance-healthcare initiative suggests a new avenue for socially responsible finance to make a difference in areas where governments are lagging.

In the Hindu tradition, Dhanvantari is the primordial god of medicine. Those who took up his calling, known as Dhanvantaris, are considered to be among the world's first surgeons. Their system of traditional medicine, Ayurveda, means "the knowledge for long life." But in India, which ranks 139th in life expectancy, it's clear that knowledge is not enough: Access to health services is the difference maker. And as MFIs are already reaching so many millions of the nation's poor, they are well positioned to provide an intermediary role in healthcare and health education. As Ela Bhatt, founder of the Self-Employed Women's Association of India (SEWA) and winner of the 2010 Niwano Peace Prize for her work in helping lift India's women out of poverty, said, "It's no longer a question of whether MFIs should add health services, but how." This new initiative is one attempt at answering this question.



Annan, Kofi. Poverty biggest enemy of health in developing world, Secretary-General tells World Health Assembly. United Nations. May 17, 2001.
Grameen Foundation. India. October 26, 2009.
World Bank. New data show 1.4 billion live on less than $1.25 a day, but progress against poverty remains strong. August 26, 2008.
Credit Suisse. Global wealth is expected to increase 61% by 2015; middle segment of wealth pyramid holds one-sixth of global wealth, to become emerging consumers and drive economic growth. October 8, 2010.
World Bank. Dying for Change: Poor people's experience of health and ill-health. April 1, 2002.
The Microcredit Summit Campaign. New Alliance to Benefit 3.7 Million of the World’s Poor by Combining Microfinance & Health. January 23, 2012.
Johnson & Johnson. Johnson & Johnson Makes Strong Progress in First Year of Initiative to Improve Health of Millions of Women and Children in the Developing World. September 20, 2011.
Ibid., 6.
Ibid., 4.
World Health Organization. World Health Statistics 2011. May 13, 2011.
United Nations. World Population Prospects. 2006 Revision. July 1, 2007.
Ibid., 6.

image: Calotropis gigantea (Crown flower), a shrub native to India and used in Ayurvedic medicine as an anti-inflammatory. (credit: jeevan jose, Wikimedia Commons)