IFC Bolsters Financing for African Health-Care Businesses
The International Finance Corp. has started a $300 million fund for small and medium-sized health-care businesses in Africa to enable them to access essential medical equipment and boost their ability to deal with the coronavirus and other health challenges.
Most smaller health-care operators can’t secure bank loans due to their perceived high investment risks, even as they serve more than half of the continent’s population, the IFC said in a statement Wednesday. Access to equipment needed for scanning, magnetic resonance imaging and other procedures is meanwhile the worst in the world, a problem the new Africa Medical Equipment Facility aims to help address, said Makhtar Diop, the IFC’s managing director and executive vice president.
“Many smaller health-care businesses in Africa don’t have the equipment they need to respond to COVID-19 and deliver other vital services,” Diop said. “Unlocking access to finance can save lives now and will, in the long term, strengthen health- care systems across the continent.”
The IFC, a unit of the World Bank that encourages private investment in developing economies, will partner with equipment manufacturers and financial institutions in setting up the new fund. It will provide advisory services and risk-sharing facilities to small businesses in Cameroon, Ivory Coast, Kenya, Rwanda, Senegal, Tanzania and Uganda, enabling them to access loans and leases of $500,000 to $2 million.
The first funds will be made available in Kenya in partnership with the Co-operative Bank of Kenya Plc and Philips N.V., Diop said in an interview.
”This partnership with IFC and Philips will allow Co- operative Bank to extend credit to a wider range of investors in the health sector, who previously have found credit availability a challenge,” said Gideon Muriuki, the bank’s chief executive officer. “Health expenditure is one of the largest budget items in many households in Kenya. Every support to make it easier for the sector to prosper and benefit our people is welcomed.”
Public health-care spending in Africa is among the lowest in the world, with the financing gap estimated at $66 billion a year, according to a report by the United Nations Economic Commission for Africa.