Can Micro-Credit Support Public Health Subsidy Programs?
The low take-up of cost-effective and highly subsidised preventive health technologies in low-income countries remains a puzzle. One under-studied reason is that the design of subsidy schemes is such that households remain financially constrained....
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| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/424101557250234558/Can-Micro-Credit-Support-Public-Health-Subsidy-Programs http://hdl.handle.net/10986/31671 |
| Summary: | The low take-up of cost-effective and
highly subsidised preventive health technologies in
low-income countries remains a puzzle. One under-studied
reason is that the design of subsidy schemes is such that
households remain financially constrained. This paper
analyses whether, and how, micro-finance supports a large
public health subsidy program in the developing world -- the
Swachh Bharat Mission -- in achieving its aim of increasing
uptake of individual household latrines. Exploiting a
cluster randomised controlled experiment of a sanitation
micro-finance program that coincided with the launch of the
SBM program, and unique survey data matched to
administrative data, findings reveal that the
complementarity runs on two levels: First, micro-credit
allows households officially ineligible for the subsidy to
invest in sanitation by alleviating credit constraints.
Second, micro-credit also helps subsidy eligible households
to overcome short-term liquidity constraints induced by the
remuneration-post-verification subsidy design to invest in
sanitation. Subsidy eligible households living in areas
experiencing large delays in subsidy disbursement, or high
toilet costs, are more likely to take a sanitation loan, but
less likely to use the loan to construct a toilet. |
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