Groundbreaking Initiative to Catalyze Investment in African Health Care Receives $10.6 Million in Public-Private Financing
December 21, 2012
(OPIC)
OPIC, USAID, Bill & Melinda Gates Foundation, Calvert Foundation &
Deutsche Bank Americas Foundations, Soros Economic Development Fund Support
Medical Credit Fund
AMSTERDAM, Netherlands – An innovative approach that could transform Africa’s
health care delivery with private sector financing obtained $10.6 million from
the U.S. Government and a quartet of leading international foundations this
week.
Called the Medical
Credit Fund (MCF), it will enable small and mid-sized health care providers
– clinics, laboratories, doctors and midwives – in Africa to receive the capital
they need to improve their quality. At the same time, it will use
internationally-certified clinical standards to gauge providers’ improvements
and a technical assistance program to ensure that funding is well-spent.
If successful in its initial implementation in Kenya, Ghana, Nigeria and
Tanzania, the MCF will expand into additional countries in Sub-Saharan Africa,
on the strength of evidence that the private sector is already transforming the
continent’s health care systems:
According to a recent World Bank and International Finance Corporation study,
the private sector already delivers 50 percent of Sub-Saharan Africa’s health
care and 60 percent of its financing, and has the potential to “bring about
significant improvements to Africa’s health care challenges, such as expanding
access to health services and reducing the financial burden on governments.” But
more expansive use of the private sector has been hindered by limited access to
capital and a lack of risk-pooling mechanisms.
What makes the project especially innovative is its ‘layered capital’ structure.
By using philanthropic capital to catalyze much large amounts of funding from
private and public sources that might otherwise stay on the headlines because of
perceived risks, the MCF is able to increase its developmental impact
significantly.
“Involving the private sector more fully in Africa’s health care is the best
way to expand access to greater numbers of people – and that’s what the MCF has
shown it can do,” said OPIC President and CEO Elizabeth Littlefield. “This new
financing will empower smaller providers to scale up much-needed services,
improve clinical standards and thereby efficiency. OPIC is pleased to team with
so many distinguished partners in this initiative.”
The MCF this week concluded financing from the Overseas Private Investment
Corporation (OPIC), the Calvert Foundation, the Bill & Melinda Gates
Foundation, the Soros Economic Development Fund, the Deutsche Bank Americas
Foundation and Dutch private investors, as well as grant funding from the U.S.
Agency for International Development (USAID). Total Impact Advisors LLC advised
the MCF on this financing transaction.
Since the start of the program in late 2010, the MCF has disbursed more than 1.4
million dollar in small loans in Kenya, Tanzania, Ghana and Nigeria.
Over the past years, funding has been provided by Dutch private donors, De Grote
Onderneming, Aids Fonds, FMO on behalf of the Dutch Ministry of Foreign Affairs,
USAID and IFC on behalf of the Canadian Government.
The MCF is an initiative of PharmAccess, a Dutch not-for-profit organization,
dedicated to improving health care in Africa through innovative approaches. The
PharmAccess Group mobilizes public and private resources for the benefit of
doctors and patients through insurance (Health Insurance Fund), loans to doctors
(Medical Credit Fund), clinical standards (SafeCare), private investments
(Investment Fund for Health in Africa) and operational research (Amsterdam
Institute for Global Health and Development).
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