More than 115 million women worldwide rely on microfinance loans. At first glance, this may look like an empowering opportunity. However, research shows a darker side: many women from improvised households running these small businesses report health challenges linked to the stress of heavy debt.

This raises an urgent question: how do we ensure that microfinance does not come at the cost of women’s well-being? One answer lies in Asasah’s Microfinance Model.

What is the Problem?

A study involving 442 women across multiple cities and provinces in Pakistan asked open-ended questions to explore the health consequences faced by small business owners. The findings revealed numerous challenges categorized into social, physical, mental and economic issues.

Specific concerns included stress, infectious diseases, inadequate housing and limited access to gas lines and health care facilities. Loans alone are insufficient to secure a thriving business and a healthy life.

Asasah’s Microfinance Model

Asasah is a Pakistan-based social enterprise that supports entrepreneurs through financial services to reduce poverty. Its mission is to boost productivity while driving sustainable poverty alleviation. What truly sets Asasah apart is its exclusive focus on women and its unique blend of financial services and health support.

Grounded in the belief that empowering women is one of the most powerful catalysts for social change, Asasah provides microloans and integrates health services to ensure long-term well-being and productivity. Every client receives mandatory health and credit life insurance, with coverage extending to their spouses.

Beyond insurance, Asasah also conducts health workshops to raise awareness and promote healthier living, ensuring that women remain productive and supported. The impact of Asasah’s approach is measurable.

Between its founding in 2003 and June 2013, the institution successfully disbursed 170,000 microloans, issued 170,000 life insurance policies and provided 35,000 health insurance plans.

Why It Is Important

Building on its findings, the study recommended several ways to address the challenges that arise after loans are provided in the microfinance sector. One key recommendation was to pair financial services with health interventions. These could include health insurance, housing loans and improvements to basic living conditions such as water and gas lines.

In other words, microfinance must be combined with health services to prevent the triple burden of debt, disease and destitution faced by many hard-working women. Only by acting on these recommendations can women sustain their businesses without being trapped in the cycle of poverty.

Thanks to Asasah’s approach and efforts, the institution has gone beyond simply providing tools for survival. Instead, it has asked a deeper question: How can we ensure women continue in their efforts? While the fight against poverty is far from over, Asasah’s microfinance model demonstrates how addressing immediate needs and long-term challenges can create lasting impact.

– Majida Mohamed

Majida is based in Minneapolis, MN, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Pixabay