Innovative Use of Microfinance Channels: Fighting Malaria with Bednets

In India, microfinance institutions (MFIs) and self-help groups (SHGs) traditionally provide loans to low-income borrowers. However, outside of providing credit, there are also other critical development needs that could be served through microfinance channels. In one of our ongoing research studies, an MFI in Orissa (BISWA), is piloting a new product in which microloans for insecticide treated bedents (ITNs) are being given to low-income households in a malaria-infested region of Western Orissa.

My colleague at CMF, Dan Kopf, who is the research associate helping to evaluate the potential of this product and the impact on participating households’ health (i.e., are rates of malaria decreasing among those purchasing bednets through BISWA in comparison to other villagers? Does it make a difference to people's health if bednets are free or purchased?), recently wrote a case study on the pilot project. BISWA offered SHG members in 50 villages the opportunity to purchase bednets through cash or credit contracts, and the case study focuses on the 1) Process of developing the product, 2) Key challenges, and 3) Lessons learned through implementation. If you are too excited to continue reading and want to dive into the study (I'm not offended), it can be found here.

To give some background on the larger study, BISWA and professors from Duke and Stanford wanted to see if microfinance channels could be used to increase ITN coverage to improve the health of BISWA’s SHG members. To rigorously test this idea, BISWA and the researchers decided to conduct a randomized evaluation comparing the benefits of the following three interventions:
1) Educating SHG members about the benefits of ITN usage.
2) Educating SHG members about the benefits of ITN usage and then giving these members enough free ITNs for everyone in their household to use.
3) Educating SHG members about the benefits of ITN usage and then offering these members the opportunity to purchase ITNs on micro-credit contracts.

I have visited Sambalpur, Orissa and gone to some of the field sites with Dan and his colleagues. The paper does a great job of highlighting, and helping to answer, some of the key questions I had after my visit, including:
1. How many people actually decide to purchase bednets?
2. Do loan officers need to be incentivised to sell this important, but relatively inexpensive product? Should such a product be bundled with larger loans?
3. Does retreatment of the nets (which is critical to the effectiveness of ITNs) actually happen? Why or why not?

This case study is a good read for those interested in how microfinance distributed channels can be used to address low-income household needs, outside of capital constraints. To learn more about this research study in general, check out this project description.