Kashf Foundation
Health is Wealth
by Wangari Muchoki, Acumen Fund Fellow
Kashf is a pioneer in extending access to financial products to poor customers.
Shana, a 60 year old housewife, has never had formal insurance. Like many Kashf clients, she is skeptical of the value in paying a health insurance premium while struggling to cover the costs of day-to-day household needs. Shana's question is just one of many that Kashf's loan officers face everyday when introducing health insurance products and trying to communicate their importance in the microfinance institution’s group meetings.
In a country with 34 percent of people at or below the poverty line, healthcare is increasingly difficult for Pakistani families to afford. Hospital expenses are steep, and patients are often forced to pay for services out-of-pocket. These costs can leave families without sufficient resources to live on, and they frequently find themselves in significant debt. For Kashf clients in this situation, unexpected expenses – and demand for repayment – often delay their loan repayment, as disposable income is consumed by the health emergency. Clients then have to borrow more to repay their loans, creating a vicious cycle.
One of the ways to protect the poor from this poverty trap is to plan for unforeseen risks by offering products like microinsurance. However, with less than 20 percent of the population covered, health insurance is still a new phenomenon. This perception is complicated by cultural norms and taboos about healthcare and hospitals that play a big role in people's beliefs. In some communities, for example, a woman is supposed to have her first child at her mother-in-law's house using a traditional midwife, as many prefer to have female doctors. Moreover, it is especially common for low-income households to view hospitals as elitist, especially the private ones. Because these clients would rather not be looked down upon when they visit for treatment, they may choose to forego a hospital trip altogether.
While most microfinance institutions only provide credit products, Kashf's programs demonstrate how microfinance can have a wider scope. A new, sustainable microfinance model providing credit, life insurance and health insurance, Kashf Foundation's programs are targeted at reaching a larger segment of the low-income market through a diverse array of financial products.
Kashf health insurance is designed to help clients prepare for health emergencies so they can continue their income generating activities even after these setbacks occur. Despite the hesitancy that clients like Shana express, Kashf health insurance has been a "miracle" to many women in Pakistan. According to client Shamim Baji, "The knowledge that being insured would not let my indebtedness harm my children in case of any mishap helps me sleep easily at night." Another client said, "I would have never bought the insurance policy of my own accord had Kashf not forced it upon me. I now truly realize the value and proposition of the health insurance and I am thankful to Kashf to have thought about us."
While it is necessary to recognize the obstacles in convincing clients of the need for microinsurance, Kashf's 300,000-person client base is testimony to the fact that poor people have the capacity to actualize their hopes toward a self-sufficient, dignified and healthy life.