MICROCAPITAL STORY: Microfinance Program Co-Sponsored by MFI Small Enterprise Foundation, London School of Hygiene and Tropical Medicine, and University of Witwatersrand Reduces HIV Risk in Women, Study Shows

Findings from a recent public health study suggest that the provision of microfinance and business training services to impoverished women were associated with a significant reduction in risk behaviors for HIV contraction. The study monitored the effects of IMAGE (Intervention with Microfinance for AIDS and Gender Equity), a research-oriented microfinance program that is co-administered by nonprofit MFI Small Enterprise Foundation and the university-sponsored RADAR research initiative. Essentially, the study’s findings suggest that the economic empowerment women derive from a microenterprise is capable of severing a financial dependence on their husband, a circumstance which frequently prevents women from negotiating safer methods of sexual intercourse. Unprotected sex amongst married couples is particularly risky in some societies, because extra-marital affairs are socially-acceptable and a common occurrence among married men.

While the body of literature on economic-related HIV interventions is limited, the study did rely on a key conclusion from previous work: that financial dependence on men directly translates to an inability to negotiate safer sexual intercourse.

Researchers employed a randomized trial in eight rural areas across South Africa’s Limpopo province, monitoring subjects over a two year period. A total of 1750 microloans were issued through IMAGE, with an average loan amount of USD 166. The repayment rate of loans in the study was 99.7 percent.

Following the study’s results, the IMAGE program is now being scaled up to a wider range of communities in South Africa’s Limpopo province. Program officials intend to reach 15,000 households before 2010.

The IMAGE program is jointly administered by the Small Enterprise Foundation (SEF), and the Rural AIDS and Development Action Research program (RADAR). Founded in 1992, SEF is a nonprofit microfinance institution (MFI) based in South Africa’s Limpopo Province. SEF’s stated mission is to “[alleviate] poverty in a sustainable manner by enabling the poor to increase their income through microcredit and by assisting them in the accumulation of savings.” To this end, SEF employs a group-based microlending methodology patterned after Bangladesh’s Grameen Bank. At the end of its 2006 fiscal year, SEF held total assets of USD 6.59 million and a gross loan portfolio of USD 5.36 million, serving 41,000 active borrowers. According to microfinance data provider MIX Market, SEF had a debt-equity ratio of 156 percent and return on assets of -1.96 percent. Rating data on SEF is not available.

RADAR, co-administrator of IMAGE, is a collaborative research initiative between the University of Witwatersrand’s School of Public Health and the London School of Hygiene and Tropical Medicine. RADAR’s research seeks to develop clinical and social interventions to HIV/AIDs that are tailored toward impoverished individuals in rural areas. According to RADAR, the bulk of its research is founded on the premise that the HIV epidemic is rooted in biological, behavioral and social processes – reflecting complex and dynamic relationships within countries and between them. Thus, generating an effective response requires a similar diversity of strategies at the level of individuals and populations.

By Ryan Benson, Research Assistant

Additional Resources:

AIDS Map: Microfinance project reduces HIV risk in South African women, gold standard trial shows

Interagency Coalition on AIDs and Development: HIV/AIDs and Microfinance

National Institute of Health: The Intervention with Microfinance for AIDS & Gender Equity (IMAGE) – A structural intervention for HIV prevention in rural South Africa: early results from a community randomized trial.

Communication Initiative Network: IMAGE

Small Enterprise Foundation: Home

University of Witwatersrand: Home

University of Witwatersrand: RADAR

MIX Market: Small Enterprise Foundation

MedicineNet: Randomized Trial

2008 International Aids Conference: Home