PharmAccess woos practitioners to multi-million dollars investment fund
To address the dearth of infrastructure in the medical sector, PharmAccess has urged private practitioners in the country to take advantage of financial opportunities under the Medical Credit Fund (MCF) initiative.
The MCF, a multi-million dollar initiative of PharmAccess International for African countries, offers funds to private facilities and medical business at single digit interest rate.
On September 12, the Overseas Private Investment Corporation (OPIC), a U.S. Government’s development finance institution, Calvert Foundation (an impact investing organisation), a private foundation and a Dutch private family office announced the closing of a $17.45 million agreement to expand the Medical Credit Fund.
The Country Director for PharmAccess Foundation, Njide Ndili, at an investment workshop in Lagos, disclosed that the special fund in now open to Nigeria.
Ndili explained that under the scheme, the practitioners would be given a special rate by their bank partners unlike what they would have gotten in the commercial setting.
She said the scheme till date had already given out over $16.6 million loans in Africa, with repayment rate put at 96 per cent.
She noted that healthcare financing in Nigeria is still at its minimal level, adding that a lot of banks have the wrong impression about healthcare business and they are unable to give loans to them.
She said: “A lot of banks don’t understand the healthcare business. The impression now is that if you finance a healthcare business or hospital and they are not able to pay, you don’t have any collateral to hold on to. And it is not appropriate to lock up the business.
“So, because they don’t understand it they don’t give a lot of loans. They are looking for quick turnaround. Like the traders and others but when it comes to healthcare the loans are very low.
“We want to help them on what the business does. We help banks understand healthcare organisation function. On the hospitals’ sides, we help train them on how to keep financial records. A lot of hospitals do not have audited statement of account; we help to build that capacity. It is a whole lot of activities to de-risk the market,” Ndili said.
In his lecture entitled, “Healthcare financing in Nigeria: Prospects and challenges”, a Health Financial Specialist, Dr. Olamide Okulaja, noted that sub-Saharan Africa accounts for 11 per cent of the world’s population, yet bears 24 per cent of the global disease burden and commands less than one per cent of global health expenditure.
Quoting a figure from McKinsey & Company, Okulaja said available estimates show that over the next decade, $25–$30 billion in new investment will be needed in health care assets, including hospitals, clinics, and distribution warehouses, to meet the growing health care demands of sub-Saharan Africa.
Okulaja regretted that of total health expenditure of $16.7 billion in 2005, roughly 60 per cent in Africa were predominantly out-of-pocket payments by individuals.
Noting that health systems in Africa are caught in a vicious circle between lack of demand and supply, he stressed the need to focus on creating virtuous circle towards system transformation through Public Private Partnerships (PPPs).
“Leveraging the efficiency of the private sector will improve supply chain management of much needed healthcare commodities. Private sector investments in local regional manufacturing of Healthcare commodities can ultimately lead to reduced stock outs and costs. This will also lead to increased employment opportunities in Healthcare,” he said.