The high cost of healthcare has always been a matter of life and death for low-income families, but help is at hand from small but significant cooperatives, writes RONALD BERA

Little Jasper Kimani, 4, who lives in Kawangware, Nairobi, underwent heart surgery seven months ago. Doctors said his heart had a hole that kept widening, gradually suffocating his lungs. This kind of operation cripples families around here, but with the help of a local micro-financing group, Jasper’s father wears a smile as he eyes his only son rolling around in dirt just a few metres away.

Medical care is a near-luxury necessity here. Among those ailing but who choose not to seek help, 44 per cent cannot afford it. Another 18 per cent are hindered by the long distances to health facilities and the attendant high cost. According to the World Health Organisation, about half of Kenya’s 40 million people live in abject poverty and lack access to basic healthcare facilities. So, whenever people fall sick from the sewage-infested water and footpaths in slums, families must choose between missing the day’s meal and seeking healthcare, which fatalistically simplifies options.

Jasper’s father could have easily got a loan from any of the local banks and paid for his son’s medical expenses, but the banks said that he had no assets to act as collateral and his wages could not qualify for monthly returns. He sought his friends’ help. “We set aside some money every week. Then we would meet at the end of every month and give all the money to one of us,” says Jasper Kimani Snr.

Although it was slow at first, people gradually started accepting the fact that coming together and investing for a cause would greatly benefit them. The endeavour eventually grew into a micro-finance outfit.  Ultimately, it broadened and started offering services such as micro-credit and micro-insurance, more or less like their bigger, corporate counterparts but different because of the regular payments of small weekly premiums. And the insurance policies cover all costs, including illnesses such as HIV/Aids and pregnancies.

The Kenyan Government has an annual insurance plan that covers an adult and all their children at a fee for up to 180 days of hospital care for a year. However, there is no supervision for outpatient care and the patients are still required to pay additional fees for such operations as heart surgery, which can cost more than a new car.

PROGRESS

Micro-finance is seen as the world’s vision to financially help out the poor by giving them a chance to better their lives through small but significant enterprises. Although there are other problems facing the poor, healthcare is the most important.

Kimani Snr’s group inspired other groups who adopted the idea and have since grown to be certified micro-finance institutions lending loans and insurances to needy people. The number now stands at over 50 formal certified members.  According to a recent study by the International Labour Organisation (ILO), about 14 million Africans use micro-insurance, a product of micro-finance, and the number of policy-holders has increased by 80 per cent in the last five years.

The government seems to have lost its ability to provide adequate healthcare for the population. The under-financing of the health sector has resulted in dependency on donors. In 2002, more than 16 per cent of the total spending on healthcare came from donors.

The WHO, which has been studying the development of micro-finance, however warns that challenges still remain. In the micro-insurance sector, for instance, one needs to have a relatively big scheme so as to pool the risk effectively. Covering a high-risk community might fail.Although there appears to be viable progress on the micro-finance front, there is still an overwhelming majority of people who still desperately need access to formal sector finance. It is estimated that over US$250 billion is needed to get money to all the poor people who need it.

Jamii Bora, a micro-finance institution, lowers its costs by partnering with mission hospitals, not disputing claims and only offering a single insurance product. The organisation began by establishing what premiums members could afford and then limiting its coverage to inpatient care.
The group began offering insurance after realising that many of the poor who took its tiny loans defaulted because they or a family member fell sick and needed money for treatment.
After they introduced an insurance scheme in 2001, defaults fell by 93 per cent. The health insurance is just over $15 a year and mandatory for members with loans. The insurance covers an adult and up to four children for all inpatient care. Around 80,000 members are insured.
The industry has grown rapidly over a short while and concerns have risen over the potential risk involved because of the high rate of capital that is flowing towards micro-finance.

NATIONAL

Mr Muhammad Yunus, an economist, says micro-finance institutions have been derided as pushing the poor to meet repayment obligations above everything else.

It has been said that micro-finance institutions can also contribute to the economic growth of a country. The development of a healthy national financial system is viewed as a means towards a broader goal of national economic development.

Kenya is said to have one of the highest maternal death rates in the world, standing at 448 per 100,000 live births, according to a health survey by the government in 2009. Home deliveries conducted by midwives contribute the most, owing to severe loss of blood during or after labour, hypertension during pregnancy, ruptured uteruses, bacterial infection of the blood — conditions that can be handled by a professional doctor.

However, most women prefer midwives, who are a lot less cheaper, compared to trained medical practitioners. Hopefully, the statistics will change for the better with the adoption of micro-finance and related services.