|Microlenders should add to healthcare
Says leading economist
Friday, October 8, 2010
Bangladesh's microfinanciers could "step in to fill the gap" left by the government's limited ability and market's failures to bring healthcare services to the people, a leading health economist said yesterday.
Microcredit could be evaluated as a public health intervention due to persistence of health inequalities and limited government ability, said Prof Cam Donaldson, Yunus Chair for Research in Social Business and Health, Glasgow Caledonian University in the UK, at a seminar in Dhaka yesterday.
The Department of Career and Professional Development Services (CPDS) organised the event at North South University. NSU Vice Chancellor Hafiz G A Siddiqi chaired the seminar on 'Markets and Health in the Home of Smith and Dr Yunus'.
Donaldson said 250 years ago, Adam Smith's influential work The Wealth of Nations described the positive impacts of commerce on prosperity and well-being.
"Now, Muhammad, today's Adam Smith, through his work Building Social Business, is championing the same message at home and abroad," he said.
He said governments across the world, including Bangladesh, have limited abilities to alter material circumstances. "So we need new solutions and we have to engage with microcredit for creating dependency on self instead of the state."
"Due to market failures, the microfinanciers can step in and fill the gap, as there is a potential for them to provide healthcare," Donaldson said, pointing to Bangladesh's path-breaking success in microcredit.
He said if they introduce participatory enterprise, it will be good for individuals as well as communities, as the percentage of healthcare expenditures coming from the government purse is just 35-40 percent of total national health spending.
The professor said the microfinanciers would need to make the healthcare services cost-effective, but they should not think about payment, as Yunus has already proven that the repayment rate among the tiny borrowers is quite high.
"Of course, social business schemes will face some challenges in launching health products, but there is long-term prospect for Grameen Bank and other models for expanding, paving way for a wider coverage of social business," said the founding Yunus professor.
Hafiz GA Siddiqi said microcredit has changed many lives and become a global model in lifting people out of abject poverty. "If we could do the same in the health sector, it would be huge."
He said Yunus, through Grameen Bank, has proved that the poor repay loans, so there is a huge potential in the country to launch social business in the health sector.
The educationist also urged all to understand the philosophy of social business and use the model to improve the health sector in Bangladesh.
Microcredit is a form of collateral-free small loan that is distributed to people with low incomes, while social business, another economic theory of Yunus, is a new kind of capitalism that serves humanity's most pressing needs. In social business, an investor aims to help others without making any financial gain for himself.
CPDS Chairman Abdul Hannan and representatives from Yunus Centre were also present on the occasion.