Abstract:
Access to finance is at the core of the development process and it is now widely accepted that well functioning financial systems are crucial for channeling funds for productive use, thus boosting economic development. Conversely, limited availability of financial services will have adverse effects, especially for those households made vulnerable by the effects of HIV/AIDS to livelihoods - making them resort to negative coping mechanisms. Drawn from the above scenario, this thesis therefore examines the need and availability of financial services at household level, their uptake of the same, and which coping mechanisms they engage in. This thesis also places risk perception to shocks in the broader debate of access to finance in households. Risk perception has always been viewed from the supply side, with financial providers being excessively risk averse, especially to certain subpopulations that are considered high risk like those affected by HIV/AIDS. Other reasons why households do not take up formal financial services except to analyze structural barriers have hardly been studied but interest has finally emerged for risk perception as an important predictor of demand for risk management strategies. Key findings drawn from households affected by HIV/AIDS and NGO’s in Chiang Mai show that households still experience the adverse effects of HIV/AIDS, though by most accounts HIV/AIDS has ceased having grave impacts on livelihood security as it did over 10 years ago in Thailand. This has been made possible through provision of free healthcare and antiretroviral drugs for affected households. But even with lowered health costs, vulnerability levels are high as there are few viable safety nets outside from the family networks; and there is a high dependence on government social protection mechanisms. Household strategies were fine tuned by households utilizing a set of social practices and community arrangements that provided additional support when individuals and households experienced shocks. While these strategies are not necessarily negative in the short run, in the long term existing mechanisms, especially those that utilize kinship might become over stretched or collapse. Uptake of formal financial products is very low, even in the specialized financial institutions, which mostly target rural communities. A number of NGO’s that are actively involved with HIV/AIDS programming provide economic and financial interventions in terms of seed capital, market access and micro-credit, and while they seem to produce results, sustainability is a key issue as programming is dependent on availability of donor funding.
