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Microfinance Tools in AIDS Care (MTAC)

Matero & Chainda Compounds, Lusaka, Zambia

Last November, POL together with its partner the Foundation For Women launched its innovative MTAC program for women impacted by HIV/AIDS in the Matero and Chainda compounds of Lusaka, Zambia. MTAC will provide women caregivers with microloans and training to engage in income-generating activities. These women, who care for HIV/AIDS patients and orphaned children, are critical to maintaining family structures in the community. However, they are themselves highly vulnerable to poverty and sickness. With the ability to generate income, they can support and empower themselves, while providing care that is essential in the community response to HIV/AIDS. 

Power of Love had to redesign and adapt existing micro finance programs due to the special circumstances of the loan recipients (need to care for orphans, need to care for other sick relatives, are at high risk for HIV infection, may have lost a breadwinner to AIDS, and may need to attend funerals on a regular basis) and provide them with training to face the challenges of running a new business. Unlike most existing microfinance programs, we focus not just on successful loan repayment but on positive individual and household impacts that improve loan recipients’ lives.

Goals

Though microfinance has been used successfully in developing countries, a primary goal during the pilot is to establish and document an effective microfinance program within an HIV/AIDS environment.  Within this context, we have identified three levels of community care givers in need of support:

In addition to optimizing the microfinance model for the HIV/AIDS environment, we are fine-tuning the model for each of these caregiving levels.

A secondary goal is to create a strong social network among caregivers so that they can mutually support one another in coping with HIV/AIDS in their community, protecting and caring for themselves, getting VCT, and increasing their sense of overall empowerment.

Implementation

The pilot was launched last November and after 3 months of team building and 5 days of business training, 70 women received loans between $60-120. Since then they have been meeting every week in groups of 5 to discuss business strategies, the success of their business, and issues such as caring for orphans, preventing HIV, and caring for the sick - issues that are inescapable in a community hard hit by poverty and sickness. Some of the businesses started by the loan receipients are:

The selection of the business(es) by each group was based on an analysis of the profitability of any existing businesses belonging to individuals in the group, as well as the extent to which there is a gap in the market that their business could fill. They were also interrogated by the other groups to make sure they had thought of all of the problems and risks their business could face.

As a result of the businesses that were started with loan money, the diet of several families has improved significantly with many women reporting that they can now afford 2-3 meals a day as opposed to a single meal before they started the business. Weekly repayment rates have ranged between 96% to 98% over the last eight months. The women are also saving a small amount each week as personal savings and have their own passbooks to record their savings.

Structure

Traditionally, microfinance programs face many challenges and therefore we carefully examined the factors that increase a borrower’s chances for success. After in depth research, Power of Love concluded that rigorous training and support in several areas are needed for long-term success. These areas are:

Our program has four corresponding phases to train participants to be successful in these areas.

Team-Building: Traditionally microfinance projects fail because participants are not supported or motivated enough, and haven’t learned to be responsible for repaying loans and running a business. Team-building addresses this risk by creating a small network of committed borrowers.  Participants learn to work in groups of five to support a common or individual business. They become accountable to one another, motivated to work together towards a common goal, supportive of each other. They learn about each other personally, especially about the struggles in their lives. They identify how each person’s individual skills can benefit the team. Participants meet weekly for several months.

Business Skills Training: Typically, microfinance programs provide capital with little training. Power of Love is unique in that it provides mandatory, in-depth business skills training to all borrowers. We are using the One-Up Business Training program, a well-known and successful course in southern Africa, to teach participants how to develop and manage their businesses. A certified Head Trainer teaches five hands-on modules:




The training program guides the participants in the selection of their business and detailed analysis of their strategy. The program is designed for beginners, but is rigorous. Extensive exercises are completed and monitored by the Head Trainer. Lectures complement the hands-on exercises. Loan receipients complete the training in groups of five, further developing their ability to work and learn as a team. Each module is a day-long session and training is completed in one week.

Loans and Repayment: Family Caregivers and Home-Based Care Volunteers receive an initial loan of K250,000 (approximately US$60) to be repaid in 25 weeks with 10% simple interest. Their total repayment amount is K275,000. Payments are made weekly in the amount of 4% (K11,000) of the total repayment amount. In addition, each participant must save K1,000 per week to encourage savings behavior.

Each member has a passbook with her own record of loans, savings, and repayment; however all records are also kept publicly, so that the women can track repayments for the entire group. Ample acknowledgment of success in repayment is used to motivate the women in their repayments. Continuous monitoring identifies challenges and group problem-solving addresses any problems that arise.

A second round of loans was made after repayment of the first was completed. Those who wished to apply for a higher level of loan were able to do so.

Home-based Care Management organizations are eligible for loans up to $2500 depending on their business plan.

Ongoing Support and Training: Weekly meetings are mandatory and continue throughout all phases of the loan cycle to create a support and motivation network for the participants. As participants go through the program, needs for additional training and support may arise and will be addressed. Additional programs may include peer training, growing a business, and literacy.

Participants

Participants in the Family Caregiver model are 60 women living in Matero compound, who have been impacted by HIV/AIDS (taking care of orphans or a sick person, or death of a family member providing income to the household). They are living in extreme poverty, with less than K4,000 (US$1) a day in income. These women were selected because they fit the typical profile of a microcredit recipient (poorest of the poor) and because they have been hit especially hard by HIV and AIDS.

Participants in the Home-Based Care Worker Model are 20 women who are volunteer caregivers with Shuko Home-Based Care in Chainda compound. Many of them are grandmothers who are also caring for orphans and family members and have very low income. These women were selected because they represent a typical group of volunteer community caregivers working with a grassroots organization trying to respond to HIV/AIDS at the community level.

Shuko Home-Based Care located in Chainda was selected to participate in the Home-Based Care Organization Model. This group was selected because it is a typical example of a small grassroots caregiving organization operating without stable funding in an extremely poor community with high rates of HIV, AIDS, and a large number orphans.

Project Team

Joy Amulya, Project Director, Fort Collins, Colorado, USA, amulya@mit.edu

Margaret Chirwa, Head Trainer and Project Supervisor, Lusaka, Zambia

Esther Shumba, Associate Trainer and Project Coordinator, Lusaka, Zambia