Online medical advice for Pakistani microfinance clients

May 20203 min readFinancial InclusionMicrofinance

From his Bangkok home office Henning Haugerudbraaten is observing how Asian financial institutions in his portfolio are helping to make local populations more resilient in times of Covid-19.

You are managing our equity participations in Asian financial institutions. How are these portfolio companies being impacted by Covid-19?

In markets like India and Pakistan, regulators have been pro-active in protecting borrowers. This has resulted in moratoriums for repayments which pause incoming cashflows for financial institutions and they are now taking steps to increase liquidity levels. Impacts vary depending on the type of clients they service, though: Our Pakistani portfolio company, for instance, predominantly serves rural customers. With the wheat harvest season in Pakistan about to begin, this bank is confident that a large portion of their borrowers will be able to repay.

All of these portfolio companies are active in the area of financial inclusion, targeting a strong impact through their activities. How are they supporting their clients during this pandemic?

All of them are acutely aware that they will need to play an essential role in providing the necessary financing once clients can get back to business. In certain cases, they contribute in other ways as well. To play its part to help contain the spread of Corona Virus in Pakistan, Khushhali Microfinance Bank, our Pakistani portfolio company, has teamed up with MicroEnsure Pakistan to provide professional medical advice through a mobile health service to all Khushhali customers. The service is an extension of their existing partnership and aims to both spread awareness of the virus and provide easy access to medical help online. This is an important step in view of the social distancing that is being enforced in the wake of an escalating health emergency.

"All of these financial institutions are acutely aware that they will need to play an essential role in providing the necessary financing once clients can get back to business."

Henning Haugerudbraaten

Why is this microfinance bank getting involved in healthcare?

As for many microfinance institutions, development impact is a key objective for Khushhali Microfinance Bank. To drive financial inclusion in rural Pakistan the company offers a whole variety of products: loans, savings, remittances, credit cards – and insurance, both for life and healthcare. In the last quarter of 2019 alone, Khushhali sold no less than 50,000 health insurance policies. Health insurance allows low-income households to access medical services against a small monthly fee in a country where a visit to the doctor is a serious expense that could break the family budget. In times of Covid-19, the importance of this service is becoming even more obvious.

How are other companies in your portfolio reacting to the pandemic?

Our Indonesia-based fintech company active in Indonesia and Philippines is at this point seeing its business shift from loans to insurance products being sought after. At the same time, their software and analytics unit is actively working with banks in the region to boost their digital capabilities, a development that is being clearly accelerated as a consequence of the Covid-19 pandemic.