Pregnancy Financing

Principal Investigator: Rema Hanna, Assistant Professor of Public Policy, Harvard Kennedy School

Every minute, a woman dies due to complications from pregnancy and birth (United Nations, 2005). The UN’s Millennium Development Goals call for both the reduction of mother mortality rates by three quarters and universal access to reproductive health care. However, significant obstacles stand in the way of such goals. In India, 450 women die in child birth for every 100,000 births (World Bank Development Indicators, 2007). Limited access to formal health institutions is one of the drivers of this persistently high mortality rate: only 31 percent of births occur in institutions (National Family Health Survey, 2006). Yet, income streams based primarily on agriculture are volatile, and banks avoid the high-risk of rural credit, leaving poor families without the financial means to obtain health insurance or institutional care for child birth.

Rema seeks to find a way to provide health care financing for the poor. Collaborating with Sendhil Mullainathan of Harvard University, they are developing a financial product designed to promote institutional delivery. The goal is two-fold. First, they will examine whether financial access impacts institutional delivery rates, which is necessary for reducing mother mortality. Second, they will try to solve the “screening” problem that limits financial access to the poor in the first place. Specifically, the foreseeable nature of delivery creates the opportunity to design a loan product with a savings component. She will test whether savings behavior provides information that could help a lender predict credit risk of potential borrowers, thereby increasing access to credit to the very poor.

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