Integrated financial and non-financial services combine microfinance with complementary services—such as informal training in health, business and financial management—to achieve positive impacts on the lives and livelihoods of poor women and their families. Credit with Education, for example, offers women the opportunity to access small loans and deposit regular savings while gaining practical knowledge to protect their children’s health, run a small business and manage family finances.  The connection between health and financial security make integrated services a unique and effective approach to overcoming chronic hunger and poverty. 

The integration of non-financial services with microfinance can be achieved through three approaches:

• Linked
• Parallel
• Unified

Linked

Services can be provided by two independent organizations, if good-quality financial and non-financial service providers are operating in the same service area and are willing and able to serve the same clients. In this linked services model, the financial service provider does not directly provide non-financial services but partners with a non-financial service provider.

In the provision of health services, for example, a financial service provider may form a partnership with a local health clinic to bring health-care professionals to regular group meetings to address the health needs of members and their families.

The linked services model is particularly appropriate when the expertise or infrastructure required to deliver the non-financial service is quite different from that needed to deliver financial services. One challenge of linkage is that neither organization has control over the quality of their partner's services. Other challenges include coordination between organizations with different cultures, missions, activities and operations.

Parallel

Parallel services are those provided by two programs of the same organization. An organization committed to providing multiple services could create two distinct programs with separate, specialized personnel who share the same organizational name and, perhaps, the same physical and administrative infrastructure. Using the example of health services again, an organization might choose to run parallel programs employing specialized health educators and care providers to offer health services to their clients while employing separate staff to provide financial services.

The parallel services model separates the financial and non-financial functions between different staff, while overall quality control is managed by one organization. This model places a larger financial and management burden on the organization than either the linked services model or the unified service model described below.

Unified

The unified model integrates the financial and non-financial functions so that the same staff of the same organization provides multiple services to the same clientele. In the case of health, the financial services staff also provides health education services to their clients.

The unified model reduces the costs of delivering financial and non-financial services, since it only requires one set of staff to provide different services. In this model, field staff must learn to perform services that may require different sets of skills. Also, the scope of the services is usually limited to education and facilitation activities that occur during regular group meetings. In the health services example, it is possible for field staff to deliver health education, but most may not be equipped to provide health care in the same way a trained health practitioner would.

Credit with Education is the best-known example of the unified model. It combines microfinance services with health, nutrition, business and financial education to provide a single integrated service for groups of poor women. This integration of group-based microfinance services and non-formal adult education has been reaching poor families in rural communities around the world since 1989.