HORIZONS PROJECT
Assessing the Contribution of Microfinance Programs to Mitigating the Impact of HIV/AIDS

The widespread prevalence of HIV and AIDS in sub-Saharan Africa adversely affects millions of households. In recent years, microfinance has been proposed as a strategy to help the households of microentrepreneurs respond to the negative economic impacts of HIV and AIDS.

Conducted in Zimbabwe, this study sought to better understand the relationship between a microfinance program, Zambuko Trust, and how microentrepreneurs’ households cope with the impact of HIV and AIDS. The study also examined how HIV/AIDS is affecting Zambuko’s operations and what microfinance institutions can do to lessen the impact of HIV and AIDS on their clients and operations.

The study involved reanalysis of survey data collected under USAID’s Assessing the Impact of Microenterprises Services (AIMS) project. The survey covered 338 Zambuko clients and 241 matched nonclient microentrepreneurs who were interviewed in 1997 and re-interviewed in 1999. The survey data were supplemented by focus groups in these same urban areas with 140 randomly selected Zambuko clients and with 33 Zambuko loan officers and branch managers in late 2000 and early 2001, and by interviews with senior managers of Zambuko.

Key findings:

• Forty percent of microentrepreneurs’ households may be affected by HIV and AIDS.
• HIV and AIDS adversely affect the financial status of microentrepreneurs’ households.
• By 1999, HIV-affected clients had greater financial constraints than HIV-affected nonclients.
• Participation in a microfinance program can lead to income smoothing and better financial management.
• Zimbabwe’s economic situation contributed more to repayment problems than illness and death.
• Instituting mandatory insurance fees and providing HIV/AIDS information to clients are among Zambuko’s responses.
• Proposals to help microfinance institutions respond to client needs include training, new loan products, and networking.

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Location

Zimbabwe

Duration

May 2000–January 2002

Horizons and Population Council researcher

Ellen Weiss

Non-Council collaborators

Joan Parker (Development Alternatives, Inc.)

Simel Essim (International Center for Research on Women)

Carolyn Barnes (Management Systems International)

Paurvi Bhatt (Step Forward, Abbott Laboratories Fund)

Erica Keogh, Nontokozo Nemarundwe, Loveness Nyikahadzoi (University of Zimbabwe)

Monique Cohen, Martin Hanratty (USAID/Washington)

Carl Henn, Tichaona Mushayandevu, Patrick Osewe  (USAID/Zimbabwe)

David Kombanie, Tawanda Sibanda (Zambuko Trust)

Sheilla Mativenga (Zimbabwe Association of Microfinance Institutions)

Donor

US Agency for International Development

Publications/Resources on this project

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See Also

• Zimbabwe

• Horizons Program

• Frontiers Program

• HIV and AIDS

• HIV and AIDS/Consequences for Individuals, Families, and Society

• Poverty, Gender, and Youth

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