Intended for healthcare professionals


International charity offers health as well as loans

BMJ 2000; 321 doi: (Published 09 September 2000) Cite this as: BMJ 2000;321:592

The WHO calculates that more than one billion people live in extreme poverty. Zosia Kmietowicz explains how one charity has found a way of improving the health and wealth of women in need

An international charity that provides small loans for women in impoverished communities has taken the unusual step of providing a health education service alongside its credit facilities. And from an early evaluation, it seems that financial and physical health messages mix well together.

The effectiveness of the village health bank scheme, run by Project Hope, whose international headquarters is in Millwood, Virginia, has been evaluated by researchers from the George Washington University Center for International Health, in Washington, DC.

The evaluation found that the health status of members of the village health banks (as measured by six critical health indicators including contraceptive use, annual cancer screening, postnatal care, immunisation, child growth, and prevalence of diarrhoea) was 14% higher than that of participants receiving credit-only services and not health education.

Now Project Hope wants to expand its village health banking scheme, from the countries where it operates at present (Honduras, Ecuador, Malawi, Guatemala, and Peru), to several other developing countries, including Thailand and the Dominican Republic.

The idea of village health banking is simple. Women in the most impoverished areas of the world are given the opportunity to start their own businesses by being offered small loans of about $80 (£53). The businesses usually centre on buying and selling food and local textiles to rural areas.

Groups of about 25 women form one bank. They elect a committee to manage the bank and take responsibility for recouping the loans. Women are charged commercial rates of interest on their loans as experience shows that these repayments can be and are achieved.

Interleaved into regular health bank meetings is the health promotion part of Project Hope's scheme.

One member of each bank is elected as the health officer and provided with health education materials that are geared to the problems of the local population. “The two elements of the scheme—credit and health education—are introduced in an integrated fashion. We appreciate that the best way to deliver health education is by an integral process so we have made provision for that by allowing a local health officer to facilitate a learning opportunity with the bank members,” explained John Bronson, director of the income generation programmes at Project Hope.

Typical discussions centre on the environment, nutrition, child health, and women's health. Activities that have been successful include cleaning up rubbish, operating health fairs, transporting a nurse to weigh and examine small children, and identifying locally available nutritious food.

With training from Project Hope, the banks quickly become self sufficient. General rules are laid out, and compliance has been excellent. Loans need to be repaid every four months, and if they are repaid successfully the member qualifies for a larger loan next time.

Altogether there are 400 banks that have benefited over 20000 women and their families. Over $7m has been loaned out in five years with less than $20000 not repaid—a default rate of less than 2

Although the project boasts a repayment rate that would make most banks envious, the real rewards of the scheme are the effects on people's lives. In Honduras, for example, women participating in village health banks showed an average improvement of 38% across important health indicators and were rated 37% better than women who did not belong to such banks. With increased wealth these women were able to spend 41% more on basic necessities such as food and medicine.

But it has not all been plain sailing. When some women are excluded from membership of a bank by other women, they can feel resentful. “We are always advocating having a good mixture of people as members. We constantly argue for a diversity of membership. But the decisions are made by the participants themselves,” said Bronson.

There is a strong wish for the group to succeed, and the group as a whole guarantees the loans, so if a particular woman cannot pay back her part of the loan, the other women have to pay it for her. The result has been that some people with less education or who are less able have found themselves excluded.

“There are also conflicts with spouses and traditional leaders, something that you find with any scheme that empowers women,” Bronson added. “We have heard of women who have been pulled out of the banks by their husbands.”

On top of these problems, which have occurred everywhere, there have been particular difficulties in operating in Malawi, owing to the exceptional poverty in that country. “The average income of people in the Latin American countries where we operate is between $30 and $60 a month, but in Malawi, it is $10.

“We have a lot of repayment problems. The challenges are greater there than elsewhere because the people are much worse off. There is a 33% illiteracy rate. On the other hand, we are helping people who really need help, which makes it worthwhile,” Bronson explained.

One of the greatest benefits of running village health banks, is the boost it gives to a woman's self esteem.

“Village banks can become very powerful groups in their own communities and extend their experience to other community problems,” said Bronson. He cited the example of a bank in Honduras that was wiped out by Hurricane Mitch in late 1998. “Rather than wait for government or foreign assistance to arrive the people of the bank were proactive. They took charge and were trying to find solutions to their problems so that they could rebuild their lives.”

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Women in health banks in Ecuador (top) and Malawi (bottom) learn about nutrition and common illnesses, along with selling and finance


“The two elements of the scheme-credit and health education-are introduced in an integrated fashion”

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