A Study of Socio-economic Impact of HIV and AIDS on Micro Finance Clients A Case of World Relief Bujumbura-Burundi

Abstract

The study investigated the socio-economic impact of HIV and AIDS on micro finance clients in relation to falling into arrears and defaults. The researcher used a descriptive research design. Stratified and simple random techniques were used to select 598 clients to whom the questionnaires were administered. Key findings of this study indicate that 12% of the respondents were infected with HIV and AIDS while 41% were affected. 75% of the respondents did not know their HIV status. However, those who were infected and/or affected saved between 500-1000 FBU ($0.5) per month and about 51% of the respondents spend significant amounts of money in HIV and AIDS related needs. 52% of the respondents also liquidate their savings and sell their valuable assets due to AIDS virus. Other factors such as low business activities, natural calamities, market mobility and small loan provision contribute to falling into arrears and default. However, these factors are made worse by absenteeism, decreased productivity, sickly dependents, medical bills, deaths and burial costs among others all related to HIV and AIDS. In the light of the results, the study recommends that micro-finance services providers should put in place new strategies and policies to help their clients keep their business returns steady. This would mitigate against the impact of HIV and AIDS. About 60% of the respondents suggested that the micro-finance institutions could shift the payback period from one week to two weeks and others suggested that the interest rate could be reduced. There is need to integrate HIV and AIDS education in the social mobilization. Further, there is also need for the provision of psychological support, funeral and health insurance.