Ugandans living with medically stable HIV are able to repay microcredit loans; paired with business training, the loans can help this vulnerable population improve their weekly income and build assets.
A Microfinance Program Targeting People Living with HIV in Uganda
Client Characteristics and Program Impact
Published in: Journal of the International Association of Providers of AIDS Care (JIAPAC), 2016
Posted on RAND.org on September 30, 2016
- What are the characteristics and financial needs of medically stable HIV-positive clients at two clinics in Uganda (one in a city and one rural) who are eligible for microfinance (MF) loans?
- Are these clients able to repay MF loans, and do they use the borrowed money to improve their socioeconomic status?
HIV has disproportionately affected economically vulnerable populations. HIV medical care, including antiretroviral therapy, successfully restores physical health but can be insufficient to achieve social and economic health. It may therefore be necessary to offer innovative economic support programs such as providing business training and microcredit tailored to people living with HIV/AIDS. However, microfinance institutions have shown reluctance to reach out to HIV-infected individuals, resulting in nongovernment and HIV care organizations providing these services. The authors investigate the baseline characteristics of a sample of medically stable clients in HIV care who are eligible for microcredit loans and evaluate their business and financial needs; the authors also analyze their repayment pattern and how their socioeconomic status changes after receipt of the program. The authors find that there is a significant unmet need for business capital for the sample under investigation, pointing toward the potentially beneficial role of providing microfinance and business training for clients in HIV care. HIV clients participating in the loans show high rates of repayment, and significant increases in (disposable) income, as well as profits and savings. The authors therefore encourage other HIV care providers to consider providing their clients with such loans.
- Overall, the HIV-positive clients eligible for MF loans have significant difficulty providing for the basic needs of the household, which include themselves and their families.
- Many clients need credit and training to start small businesses, but feel excluded from the formal banking sectors.
- More clients from the rural clinic, in Soroti, reported a perceived lack of savings opportunities and access to credit than those from the city clinic, in Kampala.
- MF program participants, on average, were able to double their weekly profit in the 9 months between baseline and follow-up.
- All HIV-positive clients who took a loan were able to repay the borrowed money within the loan’s time frame, indicating that the loans are affordable and do not create additional financial burden for this population.