HIV/AIDS and microfinance

One of the major problems Africa has to cope with is the widespread prevalence of HIV/AIDS. This deadly illness affects many households in several ways, but most importantly it significantly decreases the workforce. Zimbabwe is one of the countries with highest rates of people infected with HIV and this fact poses some threats on the success of microfinancing. However, it is also interesting to examine what effects microfinancing has on microentrepreneurs households that are affected by HIV. The epidemic is so strong that between 2002 and 2006 the population is estimated to have decreased by four million people. (1) The life expectancy of women is 34 – the lowest anywhere in the world and of men is 37. Zimbabwe has the world’s fourth – highest rate of HIV prevalence and has been grappling with food emergency, declining economic performance and the sharpest rises in child mortality in history. (2) So far there has been only one major study on how microfinancing helps the affected clients. The survey covered 338 Zambuko clients and 241 matched non-client microentrepreneurs. They were interviewed in 1997 and reinterviewed in 1999. As a participant explained, "Initially Zambuko wrote off loans of people who had died, but they stopped after realizing that some people would go to the officers and lie that some had died when she/he was alive." They study found that approximately 40% of microentrepreneurs households may be affected by HIV/AIDS. The major finding of the study was that participation in Zambuko’s program had a positive effect on the HIV-affected client households, although it may create a burden if serious illness or death occurs when the microentrepreneur has a loan outstanding. One of the most significant results of the microfinancing is that it smooths the flow of household income. When all sources of income were taken into account, the affected families averaged 2.8 sources in 1999 versus 2.3 sources for the non-affected households. - positively influenced the saving patterns – 13% insisted on