The International Finance Corporation has partnered with Gideon Muriuki’s Co-operative Bank (Co-op Bank) and Philips in a $300-million (Sh32 billion) deal to fund small- and medium-sized businesses in the healthcare sector in seven African countries to strengthen their COVID-19 response.
The countries include Kenya, Cameroon, Ivory Coast, Rwanda, Senegal, Tanzania and Uganda, The Star reported. The partnership will enable the businesses to acquire essential medical equipment.
In a 2019 publication, the IFC revealed that Sub-Saharan Africa, a region that houses 15 percent of the global population, accounts for one percent of global healthcare expenditure. This has negatively impacted the region’s economic growth and led to a lack of modern healthcare facilities, which is why many African elite travel abroad for medical tourism.
“If you want to address the great need in Africa for increased capacity — for doctors, beds, facilities — and greater quality in healthcare, you need to provide businesses with funding opportunities and operational advice. You need to look at the supply side,” said Bart Schaap, CFO of the Medical Credit Fund.
To address this issue, the IFC approved the Africa Medical Equipment Facility (AMEF), a $150-million unfunded risk-sharing facility. It founded the AMEF in partnership with local participating financial institutions and original equipment manufacturers to enable small- and medium-sized businesses to access up to $300 million in loans and leases with a tenor of up to seven years. It also finances the acquisition of medical equipment in some regional countries.
The partnership with Co-op Bank and Philips is the first under the IFC-led AMEF. It will afford health-based businesses access to funding between $5,000 (Sh535,000) and $2 million (Sh214 million) to help them lease or purchase medical equipment.
“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,” Muriuki said in a statement.