A Beijing conference has highlighted lessons learned from a United Nations microfinance initiative that has empowered people living with HIV/AIDS in China's Shanxi province to lift themselves out of poverty and restore hope in their lives.

"Microfinance is such a powerful mechanism for empowerment and poverty reduction because it unleashes the drive and innovation of the poor, including people living with HIV/AIDS, to improve their own lives and grow out of deprivation," said Alessandra Tisot, Senior Deputy Resident Representative of the United Nations Development Programme in China when addressing the conference on January 23.

Entitled "Community-Based HIV/AIDS Care, Prevention and Poverty Reduction", the project aims to improve livelihoods, self-reliance and human dignity for people living with HIV/AIDS and their families through enhanced skills and access to microfinance services; and to build a replicable model for poverty reduction among people living with or affected by the virus.

To date, over 130 households affected by HIV/AIDS have benefited from the project's microfinance scheme and many other affected households are eager to join it. Through starting household enterprises or scaling up existing income generating activities, such as animal husbandry, some beneficiaries have doubled or tripled their annual incomes.

The project is a joint effort between UNDP, the China International Centre for Economic & Technical Exchanges under the Ministry of Commerce and the National Center for STD/AIDS Prevention and Control.

Shanxi is one of the provinces in Central China that experienced a HIV epidemic among former commercial plasma and blood donors. The total numbers of people living with HIV/AIDS in both project counties around Yuncheng city account for nearly one half of the whole province.

According to the 2003 data, poverty is prevalent in both counties. In one county, 28 percent of the population lives below the national poverty line, while in the other, it accounts for 40 percent.

"In early of the 1990s, many villagers in Yuncheng were affected by HIV due to illegal blood selling," said Wu Juxian, Vice mayor of Yuncheng city. "These families faced various difficulties in their lives – many went back into poverty besides suffering physically from the disease. Their children dropped out of school and they faced severe discrimination."

According to Wu, with the help of microfinance, over 130 households have benefited from microfinance loans; over 1,200 people have received material assistance, technical support and training and psychological support; over 400 children were provided school fees, stationeries and other study materials.

Based on extensive experience with microfinance operations in 48 rural counties in China over the past few years, UNDP and its executing partner CICETE advocated an approach that addresses the root causes of HIV/AIDS by linking it to poverty reduction. UNDP and CICETE provided guidance and broadened multi-sector partnerships by selecting the Rural Credit Cooperatives (RCC), which has extensive networks down to township and village levels across rural China, as the implementing microfinance institution.

"While the poor have little physical or financial capital, there are no limits to their creativity, innovation and entrepreneurial spirit," said Tisot. "That fact that numerous men and women living with HIV have successfully improved their quality of life through microcredit clearly demonstrates that AIDS affected families do not require charity but opportunity – the same opportunities the rest of us too often take for granted."

As in previous microfinance projects, financial literacy was one of the first steps in mobilizing people living with HIV/AIDS and their families to participate in the project and was strengthened through the project.

One of the most important aspects involving people living with HIV/AIDS is the need to maintain confidentiality on their HIV status. Therefore, special training programmes were conducted for loan managers and other staff members of the Rural Credit Cooperatives (RCC). The loan agreements state explicitly that the cooperatives should not disclose the HIV status of the beneficiary.

UNDP provided guidance in modifying the financial management practices which resulted from its previous large-scale microfinance operations in rural China, and provided HIV/AIDS sensitization training to loan staff and government personnel at various levels including the Rural Credit Cooperative. The project also provided training to the local Center for Disease Control and Prevention (CDC) staff who assisted in the mobilization of AIDS affected families to apply for microfinance services from the RCC.

Through the dissemination workshops, UNDP and its national partners intend to demonstrate the project's feasibility, its importance to local development goals and its replicability in other areas of high HIV-prevalence and high levels of poverty. In the near future, UNDP in partnership with local governments hope to further integrate and scale up this model to include ethnic minority areas which are also heavily affected by AIDS.

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