The World Bank’s International Finance Corporation (IFC) has inked a deal with the Corporative Bank of Kenya and Philips to help the health sector purchase strengthen their response to the coronavirus pandemic.
In a statement to the newsroom, IFC’s Managing Director Makhtar Diop said smaller healthcare operators in Africa could not 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 Diop, adding that “unlocking access to finance can save lives now and will, in the long term, strengthen healthcare systems across the continent.”
In Kenya, the Global Financing Facility support will include 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.
With health expenditure proving to be a hindrance to accessing affordable healthcare in the country, Corporative Bank Managing Director and Chief Executive Officer Gideon Muriuki said the deal will enable extend credit to investors who found credit availability a challenge.
“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 partnership is the first of its kind on the continent and will provide a risk-sharing facility for small business access up to Ksh.32.11 billion ($300 million) in loans and leases.
The deal also included Philips, a leading technology company on the continent which will also help small businesses in Africa’s health sector purchase essential medical equipment at a time when the continent is struggling to contain the virus.
Health Syestem Leader at Philips said “Lack of access to affordable quality healthcare is one of the most pressing issues of our time.”
“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,” he added.
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 Ksh.535,320.24 ($5,000) to Ksh.214,097,769.54 ($2 million), to help them lease or purchase equipment.
Besides Kenya, IFC has also secured partnerships in Cameroon, Côte d’Ivoire, Rwanda, Senegal,
At the onset of COVID-19, the World Bank launched a Global Health Platform under IFC to help developing countries fight the coronavirus pandemic and increase their healthcare systems’ resilience.
The programme is supported by the International Development Association Private Sector Window (IDA-PSW) Blended Finance Facility and the Global Financing Facility for Women, Children and Adolescents (GFF),
The advisory program will help participating financial institutions to strengthen credit underwriting skills for the healthcare sector, small businesses in the healthcare sector to strengthen their medical equipment procurement processes, financial management competencies and business planning
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.
