By Esther Nakkazi
A new emergency loan guarantee facility for private primary health care providers in Africa with more than USD$30 million is available to private, small, and medium health care providers in Ghana, Tanzania, Nigeria, Kenya, and Uganda during COVID-19.
The loans will support private sector healthcare providers in five countries in sub-Saharan Africa to continue offering essential health services, including malaria treatments, to more than five million Africans.
The facility was created by the Health Finance Coalition, a group of leading philanthropies, investors, donors, and technical partners focused on mobilizing significant private investment to achieve transformative healthcare impact in Africa.
“COVID-19 has posed significant challenges for small and medium-sized private sector health facilities in Africa. Investing in these important health systems can help countries in sub-Saharan Africa withstand the current pandemic while supporting millions of people who rely on these facilities,” said Nafisa Jiwani, Managing Director, Health Initiatives, U.S. International Development Finance Corporation.
Private sector healthcare providers deliver nearly 50 percent of all healthcare in sub-Saharan Africa, including life-saving interventions such as early malaria diagnosis and treatment, antenatal care, and routine vaccinations.
If left unaddressed, these vital health needs could overwhelm already overburdened health systems and add to the loss of life during the pandemic. Projections in 2020, for example, estimated that moderate disruptions in treatment-seeking could lead to as many as 100,000 additional malaria deaths in sub-Saharan Africa.
“This facility is one of the first solutions of its kind to address the twin health and economic crises facing the private health sector in Africa due to COVID-19. We hope it will spark a broader response using creative finance solutions to save lives from malaria and address Africa’s most urgent health needs,” said Martin Edlund, the Chief Executive Officer, Malaria No More.
As countries have shut down sectors of their economies and asked citizens to remain at home to slow the spread of COVID-19, all health providers have seen a decrease in demand for services. For private healthcare providers, this also means decreased revenues, putting them at risk of closing during a time when access to care is already a challenge.
The Open Doors African Private Healthcare Initiative is one of the first initiatives to address the economic crunch that the private health sector in Africa is facing due to COVID-19. A catalytic $700,000 investment by the U.S. President’s Malaria Initiative (PMI) enables a $17.7 million loan guarantee from the U.S. International Development Finance Corporation (DFC) and $1.5 million in philanthropic funding from The Rockefeller Foundation, the Skoll Foundation, and the MCJ Amelior Foundation. Together, this effort unlocks more than $30 million in loans to SME health providers. Additional support comes from the U.S. Agency for International Development’s Center for Innovation and Impact (CII).
“With COVID-19 putting tremendous financial pressure on health budgets across Africa, we need creative financing solutions to help governments achieve their ambitious health goals. This initiative, which supports private health providers through a blend of grants and return-seeking capital, is a leading example. I hope to see strategies such as this one scaled up in the months to come,” said Ray Chambers, WHO Ambassador for Global Strategy and Health Financing and Chair, the MCJ Amelior Foundation.
The table below shows the type of healthcare facilities targeted as well as the services that they provide on average. Using historical data from MCF’s portfolio, private small and medium enterprise (SME) facilities and dispensaries that would receive loans from the $30M proposed guarantee facility provide the following top-five services to patients, by country:
|1||Fever/Malaria||Mother, new-born and child health and family planning||Mother, new-born and child health and family planning|
|2||Hypertension||Fever/Malaria||Respiratory tract infections|
|3||Diabetes||Respiratory tract infections||Fever/Malaria|
|5||Respiratory tract infection||Gastrointestinal diseases||Gastrointestinal diseases|
“Private sector healthcare providers are critical to safeguarding health and well-being. Financial support from Open Doors African Private Healthcare Initiative will enable them to support the COVID-19 response and continue to provide essential health services that keep people and communities healthy,” said Naveen Rao, Senior Vice President for Health, The Rockefeller Foundation.
Of the five million patients that the loan facility could impact, almost 3 million are low-income patients, and approximately 2.4 million are women and 1.4 million are children, who are disproportionately at risk of malaria and other infectious diseases.
The loan facility will be managed by Malaria No More and loans will be administered through the Medical Credit Fund (MCF), a non-profit health investment fund. Loans are expected to average $17,000 per provider to help stabilize operations, buy essential medical equipment including personal protective equipment, and finance small-scale construction to protect patients from COVID-19 infection.
ODAPHI’s process will ensure that SMEs take on appropriately sized loans – big enough to finance their needs but small enough to be reasonably repaid. If a borrower is unable to repay the loan due to unforeseen circumstances, the guarantee facility can protect up to 80% of a potential net principal loss, depending on loan specifics.
MCF’s partner organization SafeCare, in collaboration with PMI, will provide training materials to facilities on how to continue providing routine services safely during the pandemic.
“This initiative multiplies impact through its blended finance structure and collaborative efforts. Through the cooperative effort between the Skoll, Rockefeller and MCJ Amelior Foundations, this loan guarantee leverages philanthropic capital to unlock additional, essential funds to preserve vital health services throughout Africa,” commented Bruce Lowry, Senior Advisor, Skoll Foundation.
“Many of our clients are under increased pressure as a result of the COVID-19 pandemic and see patient visits and revenues decrease. This agreement helps us to further support health entrepreneurs so they can continue providing the services needed to keep their communities healthy,” said Kennedy Okong’o, Director East Africa, Medical Credit Fund.
An initiative like this is urgently needed to save lives and livelihoods as COVID-19 persists on the continent. Private health facilities provide 50% of all health services in Africa, yet many of these providers are at risk of closing due to lost revenue amid the pandemic.
Keeping PHPs open is critical for ensuring Africans can safely access essential health services during the pandemic and preventing a resurgence of other deadly diseases. It also is important for helping local economies recover by ensuring these businesses can continue operating.
For more information or to apply for a loan visit: www.medicalcreditfund.org