Women are encouraged to enroll in this product as early as possible during their pregnancy. Women who take-up the product, save regularly over the course of their pregnancy, with the amount of saving left open for the borrower to decide.
Two weeks prior to delivery, the savings accumulated by the woman is given back to her along with the loan since the savings behavior and not the amount of savings, works as collateral. The underlying principle behind this idea is that if a poor woman can forgo some of her current consumption for savings, then she can also forgo certain part of her consumption in future periods for repaying the loan
An immediate question that springs to mind is – what if pregnant women who enroll in this savings-loan programme cut back on consumption of essential foods/inputs that are critical to their health and that of their babies? This is apart from the standard questions about which economic class this product is likely to benefit and who it is likely to exclude.
The other important question is – why go the credit route when India already has the Janani Suraksha Yojana (JSY) for women living below the poverty line –
Under this scheme, a cash incentive of Rs.700/- will be paid to Rural Below-Poverty-Line pregnant women who have their deliveries in Government hospitals and PHCs in the state.
The objective of this scheme is to promote institutional deliveries among the rural poor, by assisting them in meeting the expenses in traveling to the hospital town incurred by the pregnant woman and one or two family members who accompany her, loss of wages for the family members accompanying the pregnant woman for up to two to three days, food and incidental costs for the accompanying family members, etc.
Certain states like Andhra Pradesh have also been running add-ons that complement the JSY and provide an additional assistance for use of public hospitals for safe deliveries. This does call into question the state of hygiene, infrastructure and quality of healthcare in India’s public hospitals – especially the primary and community health centres. However, recent news reports have claimed that the JSY has made a dent in the rates of maternal mortality in India – conveying to me that the programme is at least being implemented in parts of the country.
CIFD’s pregnancy financing product hits the right spot with its savings component. If the credit product sees a strong uptake, it would in a way expose the poor implementation of government health schemes such as the JSY. This also reinforces though, that where possible, there is no alternative to taking steps to strengthen the public health systems and implementation of government schemes. A credit product, while giving people more choice of health providers, is unlikely to be the panacea for India’s maternal mortality problem.