The Co-operative Bank has partnered with the International Finance Corporation (IFC) to offer loans to healthcare businesses in Kenya at more favourable terms.
The businesses that will benefit from the funding program include clinics, hospitals and laboratories with a maximum of 300 employees. They will access up to 90 percent asset financing of up to Sh. 200 million.
“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.”
The deal signed under IFC’s Africa Medical Equipment Facility will be seeking to offer the small and medium-sized healthcare businesses local currency loans for purchase or lease of medical equipment.
The financed asset will be the primary security and all risk insurance cover will be provided through Co-op Bank Bancassurance.
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The repayment period for loans accessed under the scheme extends to 60 months as opposed to the usual 36 months, while the interest rate is at 10 percent compared to the banking industry’s average of 12.1 percent.
“Under the scheme, the global financier has also partnered with original equipment manufacturers and the Kenya Healthcare Federation to provide training on purchase of vital medical equipment for the businesses. 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.
Training of the healthcare SMEs will enable them navigate the planning, budgeting and procurement process to access advanced medical equipment they need to serve patients. The training program is supported by the Government of Norway.
