IFC, a member of the World Bank Group, today launched partnerships with leading health technology company Philips and the Co-operative Bank of Kenya to help smaller businesses in Africa’s health sector purchase essential medical equipment and strengthen their response to COVID-19 and other pressing healthcare challenges.
The partnerships are the first under the IFC-led Africa Medical Equipment Facility, designed to provide risk-sharing facilities to help small businesses access up to $300 million in loans and leases. Through the facility, IFC is partnering with medical equipment manufacturers and local financial institutions to support healthcare providers in Cameroon, Côte d’Ivoire, Kenya, Rwanda, Senegal, Tanzania, and Uganda.
The loan size to smaller healthcare providers—which serve more than half of Africa’s population, including low-income patients—is expected to range from $5,000 to $2 million, to help them lease or purchase equipment.
Currently, most smaller healthcare operators in Africa cannot secure bank loans due to their perceived high investment risks, meaning they can’t afford medical equipment, renovations, or to recruit qualified personnel.
“Many smaller healthcare businesses in Africa don’t have the equipment they need to respond to COVID-19 and deliver other vital services,” said Makhtar Diop, IFC’s Managing Director. “Unlocking access to finance can save lives now and will, in the long term, strengthen healthcare systems across the continent.”
“Lack of access to affordable quality healthcare is one of the most pressing issues of our time,” said Winfried Jansen, Health Systems Leader, Philips Africa. “Philips aims to contribute substantially to improving healthcare in Africa through innovative solutions that are tailored to local needs. Many clinics on the continent would like to invest in new medical technology but find it difficult to obtain the necessary finance. Together with Philips Capital and through this partnership with IFC we are enabling healthcare facilities to make quality healthcare available to a large group of people.”
Risk-sharing is an effective instrument to encourage financial institutions to lend to smaller businesses. The IDA PSW and the Global Financing Facility’s support in the form of a first loss guarantee enables IFC to extend risk-sharing facilities to the most challenging markets including conflict-affected countries.
“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. 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,” said Dr. Gideon Muriuki, Group Managing Director and CEO, Co-operative Bank of Kenya.
The facility includes an advisory services program to help small businesses in the healthcare sector strengthen their medical equipment procurement processes, financial management competencies and business planning. The advisory program will also help participating financial institutions to strengthen credit underwriting skills for the healthcare sector. In Kenya, the Global Financing Facility support includes technical assistance to improve the quality of care for small and medium-sized healthcare facilities that are serving low-income populations, including women and children.
IFC expects to expand the Africa Medical Equipment Facility to more countries and invites interested financial institutions and equipment manufacturers to contact IFC to explore partnerships.