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Medical Credit Fund Progress Report 2013


Preface Many small and medium-sized clinics in sub-Saharan Africa are too small to qualify for bank loans, and too large for microfinance lending. To fill this gap, the PharmAccess Group initiated the Medical Credit Fund. So far, more than 500 clinics have joined the program to work towards delivering better quality healthcare for their patients. Since starting operations in 2010, we have seen a growing demand for and supply of affordable loan products that are tailor-made for the financial carrying capacity of healthcare SMEs in Africa. Combining these loans with a performance-based system for improving business and clinical quality performance, however, remains unique to the Medical Credit Fund. Ultimately, we aim to contribute to a financially sound healthcare system in Africa by building a strong private sector that complements the public system and provides improved quality services for all. In 2013, our program almost doubled in size. The number of clinics expanded from 279 to 516, the number of disbursed loans increased from 227 to 442, and the loan volume grew from USD 1.7 to 4.1 million. As such, we have gained enough experience and momentum to scale up our activities and reach full speed in the years ahead. The success of the program has everything to do with the strong relationships we have built over the years. Our implementing partners in Ghana, Tanzania, Kenya and Nigeria have been instrumental in growing our network, building a strong loan portfolio and helping clinics to improve their business and the quality of their healthcare services. We have also noticed a ripple effect in the banking landscape: seeing the potential in the healthcare sector, banks are starting to develop loan products of their own. Milestones of the past year include the disbursal of the first pharmacy loan, the 500th clinic in the program and being selected for the Impact Assets 50 2013. We remain exceedingly grateful for the involved support of our investors and donors. The Dutch government (through Dutch development bank FMO), USAID, G-20 SME Finance Challenge, AIDS Fonds and Dutch private donors were among the first to commit. We are also a member of the African Health Markets for Equity (AHME) consortium. Our investors are the Overseas Private Investment Corporation (OPIC), Bill & Melinda Gates Foundation, Soros Economic Development Fund, Calvert Foundation, Deutsche Bank Americas Foundation and Dutch private investors. Just last March, OPIC honored us with an Impact Award for Access to Finance. As we ramp up towards our ultimate goal of providing USD 70 million in financing to more than 2,500 clinics by the end of 2019, such votes of confidence reinforce our motivation to continue to work towards inclusive healthcare for Africa. Monique Dolfing-Vogelenzang Managing Director May 2014



Vision and mission Financing medical quality improvement in Africa Vision To make quality basic health care accessible for low-income people in Africa.

Mission To contribute to building a better healthcare system by enabling private healthcare providers to fully explore and develop their potential as key players in the healthcare sector. Medical Credit Fund assists healthcare clinics in procuring loans from local banks, combined with a comprehensive technical advisory services program for quality improvement and business planning. We strive to strengthen the business cases of private primary healthcare providers by: • improving the quality of their clinical and medical services by facilitating access to investment capital; • providing business advice and top quality technical advisory services.


world’s population


global disease burden


global health expenditure 3

While Sub-Saharan Africa already carries over 44% of the world’s communicable diseases, non-communicable diseases such as diabetes, cancer, high blood pressure and heart disease are also

on the rise. Meanwhile, the continent faces a severe shortage of trained medical personnel and healthcare infrastructure. At the same time, sustained economic and population growth are

leading to an increased demand for affordable and quality healthcare services. Therefore, expanding the capacity of Africa’s primary health systems is becoming increasingly important.


‘This approach is groundbreaking, well executed and comprehensive, providing a solid foundation for generating social and financial returns.’

Access to capital The crucial role of the private sector in complementing the public healthcare system is becoming increasingly clear. However, these primary healthcare facilities are severely underfunded and the investments needed to build a system of affordable and quality healthcare for all are falling short. Just as many individuals in the developing world lack access to basic finance, so do many small businesses, including health clinics. As public resources in most African countries are limited, the private healthcare sector serves over 50% of the population. The vast majority of private healthcare providers in Africa are small and medium enterprises (SMEs). This segment includes smaller hospitals, diagnostic centers, health centers, dispensaries, maternity homes and nurse-driven clinics. Access to capital would give these health SMEs the opportunity to improve their facility and attract more patients. Many SME owners, however, are medical professionals with little to no experience in business management.

‘We continue to focus on capacity building through technical advisory services. With their newly gained knowledge of the healthcare financing market, clinics are becoming keen to bank, to apply for a loan and improve their facilities.’ Denis Mosha, Business Advisor at Association Of Private Health Facilities in Tanzania (APHFTA)

Without a credit history, adequate bookkeeping and accounting systems, financial performance records and sufficient assets, many are unable to secure formal bank loans. While a growing number of banks are interested in the healthcare sector, they must also adhere to strict internal and regulatory guidelines.

Investment climate The investment climate in sub-Saharan Africa suffers from low trust levels, weak institutions and high transaction costs. From a potential investor’s point of view, the private health sector can be quite unattractive. Without independent and transparent benchmarks or a quality assurance system, banks or patients cannot compare, assess and rate healthcare quality. Enforcement of loan contracts, such as retrieving equipment from a facility in a poor community, is difficult for social reasons. Finally, revenue streams are erratic due to the high percentage of out-of-pocket payments. To cover all these unknown risks, investors levy high surcharges and mark-ups. These terms make cost of capital unaffordable for most healthcare providers. This leaves the private health sector in a vicious circle of low trust, low demand, low willingness to prepay, few investments and low quality supply. Medical Credit Fund aims to help create a virtuous circle by building trust, by reducing uncertainty and risk, and by setting clinical standards in order to make quality improvement measurable.


Dia Martin Director Social Enterprise Finance Team Overseas Private Investment Corporation (OPIC) OPIC is the U.S. Government’s development finance institution and one of Medical Credit Fund’s investors. In March 2014, OPIC recognized Medical Credit Fund with its first ever Impact Award in the category Access to Finance.

“OPIC has a long history of supporting access to finance for SMEs in sub-Saharan Africa. We were impressed by Medical Credit Fund’s well thought-out funding process. As a winner of the 2010 G20 SME Finance Challenge, Medical Credit Fund presented an innovative model for public and private partnerships to fund private sector healthcare providers in sub-Saharan Africa. Its focus on the critically underfunded healthcare sector in Ghana, Kenya, Tanzania and Nigeria enables OPIC to catalyze significant impact on a region that has a disproportionate amount of the world’s disease burden, yet accounts for less than one percent of global health expenditures.

OPIC Impact Award The inaugural OPIC Impact Awards recognized excellence and innovation in development finance, and MCF’s novel approach to addressing a market gap in the healthcare sector in sub-Saharan Africa distinguished it for the OPIC Impact Award for Access to Finance. Medical Credit Fund’s integrative business model makes it unique among OPIC clients. By working exclusively through local banks, Medical Credit Fund supports the development of a bank-led model to increase lending to SMEs in the healthcare sector. The phased lending strategy limits direct credit risk and helps first-time borrowers build a credit history. By successfully repaying each loan, clinics develop a relationship with the local bank, eventually allowing them to borrow from them directly. Additionally, Medical Credit Fund partners with local industry associations and technical advisory service providers to give borrowers technical support to improve business planning, financial competence and patient quality of care under SafeCare, a multi-step certi-

fication program specifically designed to establish a uniform, measurable standard of care for private health facilities in subSaharan Africa. This approach is ground-breaking, well executed and comprehensive, providing a solid foundation for generating social and financial returns. Impact investing In recent years, OPIC has helped to shape the landscape of the relatively young field of impact investing, which is continually producing successful models that set a blueprint for generating stable, sustaining financial returns while addressing social and environmental issues. Medical Credit Fund is one of a unique group of innovators that will help increase access to healthcare and improve the quality of care sector for low and middle income populations in sub-Saharan Africa. Medical Credit Fund’s catalytic model is scalable and impactful. Their development impact and innovative financial models are trendsetting, and a valuable contribution to the impact investing community.”



‘We have developed our infrastructure, building, our machinery and even our staff. All my staff are better equipped now, intellectually, to handle the challenges that medical services demand.’ Dr. Jacob Kayode Agbede, Ogo Oluwa Hospital, Bacita, Nigeria



Our approach As many health SMEs do not qualify for traditional bank loans, they struggle to find the money to purchase modern equipment, expand their facilities or even pay for basic repairs. With the help of our partners, Medical Credit Fund gives them the opportunity to build a financial track record, to grow their business acumen and to improve the quality of their healthcare services. limited settings. As a result, banks can Healthcare providers need investment compare healthcare facilities, evaluate capital to grow their businesses and progress according to fixed standards improve the quality of their healthcare and measure investment results. services. However, most African medical professionals in the private sector, especially • Business advisors provide business those who serve low-income groups, training, perform financial due diligences have limited or no access to credit. Medical and facilitate the interaction between Credit Fund addresses the financial and the clinics and the banks where necessary. medical constraints of this healthcare They work with health SMEs to compose market. Our approach hinges on very annual statements, propose efficiencies close cooperation with and between clinics, in management and operations, scan technical advisory (TA) partners and the market for growth opportunities banks. By providing performance-based and, finally, support them in producing financing in combination with technical a convincing business plan. support, we build capacity and make clinics bankable. Ultimately, we aim to improve A short history access to affordable quality health care Medical Credit Fund is a not-for-profit for low-income people. foundation that aims to increase access to quality healthcare services for low-income Technical advisory program Africans by facilitating loans and technical Our local TA partners recruit health SMEs advisory services for healthcare SMEs. for the loan program and produce expert It was established in 2009 as one of the opinions, which outline staff and patient offshoots of the Health Insurance Fund, and numbers, long-term investment plans and has since set up operations in Tanzania, Kenya, how the clinic intends to use the loan. They Ghana and Nigeria. Just after disbursing our monitor business and quality performance very first loan, we won the G20 SME Finance throughout the tenure of the loan. Challenge Award for our innovative financing • Quality advisors provide quality training model. In 2012, we closed our first round and help SMEs to compose their highest of investments. In early 2014, we received priorities for quality improvement. the inaugural OPIC Impact Award for Access This is based on a clinical due diligence to Finance. using the SafeCare methodology, an international quality assessment system designed especially for resource-



SafeCare assessment

quality improvement


repayments and possibly a next loan


more patients, receiving better health care

health insurance program

Ultimately, the TA partner assesses the clinic’s general performance, identifies its most urgent needs and improvement priorities, formalizes the relationship between the clinic and a local bank, and calculates whether the clinic will be able to repay the loan within a given time frame. Once the clinic is ready, the TA partner assists in submitting a loan application to the bank. These TA services significantly help to reduce the investment risks and to build trust on the side of the borrower.

Loan program Medical Credit Fund has a risk-sharing agreement with local banks in all four countries of operations. Once a clinic has submitted its business case and we have approved it, the clinic sends the loan application to our local partner bank. The loans are provided in the local currency. The clinics in our program are most often first-time borrowers. By starting them off with smaller loans, we protect them from over-stretching their repayment capacity and help them to establish a



SafeCare levels of improvement


Certificate definition

The SafeCare quality improvement program is an integral part of our approach. Sub-Saharan Africa has a shortage of institutions and standards that can ensure objective measurement and rating of the level of quality of basic healthcare facilities. As a result, quality levels are not transparent, benchmarking is not possible and patients face uncertainty with regard to the quality of services at different facilities. Building institutions and creating standards that help patients to make informed decisions about health care will address these issues. In addition, such systemic changes can stimulate providers to improve the quality of care, motivate performance-based financing mechanisms by (inter-)national donors and investors, and enable local and national healthcare authorities to monitor and regulate healthcare providers. The SafeCare quality improvement program works with a set of unique and internationally recognized standards that are realistic for resource-limited settings while not compromising on quality levels. These standards focus on ‘bottom of the pyramid’ public and private healthcare facilities such as dispensaries and health centers, which often struggle with patient safety and quality demands.

Accreditation Level: Excellent quality systems in place,

Advanced Assessment

proven track record of continuous quality improvement, is in substantial compliance with the SafeCare standards, and meets the decision rules for accreditation by

Level V

Intermediate Assessment

V Continuous quality improvement, demonstrates long-term commitment, ready for accreditation program and self sufficiency of continuous quality improvement. Very limited technical assistance required. IV Strong quality systems in place, but high-risk areas still in need of attention. Limited technical assistance required. III Medium quality strength, acceptable but vulnerable to changing environment. Focus on self-evaluation of

Level III

Level IV

Basic Assessment

Accreditation Level

independent organization COHSASA.

quality improvement processes using quality indicators, guidelines and standard operating procedures.

Level II

II Modest quality strength, requiring medium technical assistance. Healthcare quality is still likely to fluctuate. Focus on the securing of quality systems and processes

Level I

especially in high risk areas. I Very modest quality, with continued need for periodic technical support. Focus on implementation of processes

Entry Level

and quality systems and the availability of financial means to ensure availability of proper infrastructure and assets. Entry Level: Low quality, however the organization has shown leadership commitment and a strong desire to provide safe health care and recognizes that significant improvements are needed to reach levels of consistent, efficient, safe quality care for each patient. It has




fluctuating quality healthcare provision due to the unavailability of services at times.

positive track record of borrowing and repaying their loans. This policy of incremental lending combined with the technical advisory services is proving effective, resulting in a high-performing loan portfolio with a 97.5% repayment rate in 2013. If a clinic already has an established track record with a bank, if it is too large to benefit from a loan of that size, or if it has successfully repaid the small loan, clinics can apply for a medium or mature loan. These loans can be as high as USD 50,000 to 350,000 respectively, and have a tenure of 24-48 months. Medium and

mature loans have additional requirements, such as a SafeCare entry assessment, a first quality assessment, a two-day business and a one-day quality training, the development of a quality upgrade plan as well as a business plan. These loans are cofinanced by the local bank, thus leveraging the MCF capital. Our approach builds trust among banks and prepares clinics to independently qualify for future, possibly larger bank loans. As clinics benefit from the technical services within our program, their business potential and the quality of their healthcare services grow.

‘The combination of the loan with business and quality trainings has helped me decide how to best use the money for quality improvement.’ Elizabeth Omane, owner and manager of Victory in Christ Maternity Home, Ashanti region, Ghana The methodology consists of measurable steps towards quality improvement. SafeCare methodology is being firmly embedded in the legislative framework of the countries we work in. Through strategic partnerships with the governments of Kenya, Tanzania, Nigeria and Ghana and government agencies such as the National Hospital Insurance Fund (NHIF) in Kenya and the National Social Security Fund (NSSF) in Tanzania, SafeCare is recognized as (one of) the external evaluation systems that sets standards and certifies quality of care. Interest in the program continues to grow. From the onset, financing quality improvement through the SafeCare program has been a key aspect of our technical advisory program. While full accreditation may remain a bridge too far for most clinics, SafeCare creates an improvement path that offers healthcare providers positive incentives to move steadily upwards in quality. 11





• BancABC • National Microfinance Bank (NMB)

• Association of Private Health Facilities in Tanzania (APHFTA)


• KREP Bank • Chase Bank

• Kisumu Medical and Educational Trust (KMET) • Population Services International (PSI/Kenya) • Marie Stopes International, Kenya (MSK)


• uniBank • HFC Bank

• PharmAccess • Marie Stopes International, Ghana (MSG)


• First City Monument Bank (FCMB) • Diamond Bank

• Hygeia Foundation • Society for Family Health (SFH) • Marie Stopes International, Nigeria (MSN)


‘I have a strong conviction that not long from now, healthcare consumers in my country will come to the knowledge of demanding quality of care. Through the Medical Credit Fund and SafeCare program, I feel that we will achieve this point faster.’ Bonifacia Benefo Agyei, Senior Quality Advisor at Medical Credit Fund/SafeCare/PharmAccess, Accra, Ghana

Our partnership with MCF is a win-win situation. It is not only a profit-making avenue for us, but a means of giving back to society and boosting the health sector at the same time. Tornam Sapati, Head of Credit Risk department, uniBank, Accra, Ghana




A closer look at our clinics

Levels of the healthcare market

specialized services, including complex curative interventions. Full range of (para)medicals and specialists. HIMS is used for data capturing/analysis. Laboratory, radiology and pharmacy services available.

Includes complicated abdominal surgeries.

DISTRICT HOSPITAL or faith-based/private hospital with similar services. Providing 24 hrs service, maternal health, HIV and TB treatment, minor and some major






PRIMARY HEALTH CENTER consisting of medical


doctor, nurse and lab technician offering minor surgery


When taking a closer look at these clinics, it quickly becomes obvious why they need other sources of funding to finance improvements to the facility. Their average monthly revenues, representing income before taxes and other expenses such as rent, salaries and administrative costs, leave little room for extra activities. Medical Credit Fund closes the financing gap by providing small loans and technical advisory services to make sure the clinics are able to pay them back.

of medical procedures except specialized treatment.

and chronic disease management.


Need for capital

REFERRAL HOSPITAL providing a broad spectrum


Medical Credit Fund focuses on a broad spectrum of private primary healthcare providers, ranging from basic health centers to district hospitals. Most of them are lower tier facilities, with little or no access to capital. Over the years, we have built an extensive database containing financial and clinical details about every healthcare facility at the moment of entering our program. As such, we have been able to shape an average profile of our clinics. Continuous analysis of these data helps us to improve our program to best suit the needs of these facilities.

The Medical Credit Fund operates mainly in the segments of the healthcare market where most health SMEs are active.


Since the disbursement of the first loan in 2010, we have gathered a wealth of information on the clinics in our program.

BASIC HEALTH CENTER staffed by clinical officer

Average clinic profile in Kenya (pre-loan)

offering general health and maternal health care.

Primary health centers HEALTH SHOP/NURSE-DRIVEN CLINIC giving advice on basic health care issues.

Average monthly revenues in USD

Medical staff

Total staff

Patient visits per year











Basic health centers

Average monthly revenues in USD

Medical staff

Total staff

Patient visits per year











Primary health centers make three to four times more revenues per month than basic health centers. They also employ four times more staff, as they offer more services and thus need more medical staff such as nurses, midwives and lab technologists. They can generally also afford to employ more non-medical staff like an administrator, a receptionist, cleaning personnel or guards. Basic health centers treat a relatively high number of patients when taking into consideration their smaller amount of staff.

Urban vs rural Urban and rural facilities in our program are more alike than one might expect. As the comparison in the infographic on the opposite page pertains to clinics within the same category, the range of services offered by these urban and rural clinics and the amount of patients they receive is relatively alike. The difference is only pronounced when it comes to monthly revenues: urban clinics have a higher income. This difference can be explained by the higher prices charged by urban clinics.





Franklin and Alice Bett Directors Siloam Hospital, Kericho (72 beds, NHIF-accredited)

“As a former politician and a lawyer, neither of us have a medical background and we have benefitted greatly from the program. Implementing SafeCare has led to hygiene improvements and an enormous decline in infections. Our patients now spend less time in hospital. We have improved our data management and follow clear guidelines on equipment maintenance, so that our equipment functions better and longer. Also, we have seen great impact with the nursing care, both in terms of healthcare quality as from a human resources perspective. Staff retention used to be one of our main challenges. Now, job satisfaction is so high that our nurses choose to stay with us even though they might be able to earn more at a public facility. With our second loan, we are constructing a new operating theater and a 3-bed intensive care unit. We are also building a laboratory and expanding our maternity wing.”


Medical Credit Fund

Esther Daudi

Evelyn Gitonga

Business Development Officer Special Projects K-REP bank, Nairobi

Senior Business Analyst Medical Credit Fund, Nairobi

As the service delivery of the clinics in our program improves, they attract more patients, cash flows grow and their business becomes viable. Also, their financial track record means we can greatly enhance the turnaround time for appraisal of follow-up loans.

“Before joining Medical Credit Fund, I worked in the banking sector. I know what most banks look for and can help clinics write bankable business proposals which result in minimal declines. While many banks recognize that clinics can be a viable business case, most still approach the sector from an asset financing point of view. Often, banks simply look at the cash flows to decide if doctors will be able to repay their loan. Medical Credit Fund has a more holistic approach: we send in SafeCare and business analysts and provide practical advice. If a doctor wants an x-ray machine, we may suggest he get a dental chair instead so he can distinguish himself from his competitor down the road. Or advise him to start by making the clinic more presentable. We help doctors to think like businessmen: what will generate a return and improve quality at the same time?

The loan portfolio has recorded an increasing trend. Building on our positive experiences with the program since 2010, we are taking more ownership. We have rebranded the loan product as TABIBU, a Swahili name which we expect will do well in the market.”

Most clinics in our program experience results first-hand in less than six months. This concept works. I am happy to have switched jobs. At the end of the day, achieving quality healthcare for Kenyans is a very rewarding target to have.”

“Before joining the program, the bank lacked the technical knowhow to provide loans for private healthcare practitioners. Medical Credit Fund has opened up these avenues by bringing in bankable loan proposals and by setting up risk and fund sharing agreements. We then perform due diligence according to our own lending mechanisms. Upon disbursement, we monitor the loan to ensure timely repayment and provide trainings on relevant financial topics such as account operations and proposal writing.



7% 9%

Impact 37%

Clinics in the program are providing better quality services, growing their business and serving more patients. As such, Medical Credit Fund is building trust in the private healthcare sector. The expansion of our program coincides with a change in the African healthcare financing landscape, where we have noticed an increased willingness of African banks to invest in the local private health sector. Healthcare providers are also showing a growing demand for capital. Clinics that have received a loan are in better shape than when they entered the program, showing on average a 12% increase in quality. They also experience a strong improvement in their business, with 22% increase in patient visits over a six month period and a revenue increase of just over USD 5,000.

Loan portfolio The loan program is specifically designed to provide access to capital for clinics that would otherwise rarely qualify for a traditional bank loan. As many of these clinics are first-time borrowers or financially less experienced clients, our loans carry higher management fees and a higher risk profile. Despite this higher risk, our loan portfolio generated an impressive 97.5% repayment rate in 2013. After successfully repaying their first loan and improving

their business administration and clinical quality through the technical advisory program, many clinics apply for larger loans.

15% standards will help us grow our portfolio efficiently, thereby bringing quality healthcare within reach of a growing number of people in Africa.

Catalytic role with banks As we work exclusively with local banks, the success of the program is alerting African banks to the potential of the healthcare sector. More and more, we are seeing banks develop loan products of their own. As such, our program serves as a catalyst, creating an active and sustainable market where African banks will be able and willing to serve the financial needs of health SMEs. By helping banks to train their staff and build internal resources, we contribute to long-term support for the healthcare sector. In 2013, we introduced a standard reporting template that is generated directly out of the banks’ loan administration systems. This template will diminish the administrative burden of manual reporting, creating a single source of data for accurate monitoring of cash flows. We have also developed standardized flowcharts, procedures and protocols in order to guide and streamline operations. High reporting





Healthcare providers in program




Approved Expert Opinions and Business Plans




Trained professionals




Loans disbursed (cumulative)




Value of loans disbursed in USD (cumulative)




SafeCare Entry Assessments




Patient visits to MCF clinics per month





First pharmacy loan Many pharmacies, and thus also patients, deal with issues like illegal, fake or expired medicines. Pfizer’s Global Health Fellows is an international corporate volunteer program that places Pfizer employees in short-term assignments with international development organizations. In 2013, two Pfizer fellows researched the possibility for a loan product for pharmacies in Kenya, aiming to connect the loan with supply chain improvement. In September, in collaboration with KMET, we disbursed the first pharmacy loan. These loans will help pharmacies improve their supply chain issues, leading to better medicine for patients.

Improving the facilities Clinics tend to use their loan primarily for improving infrastructure. Renovations include tiling, roof repairs and updating the laboratory, the consultation room or the reception area. About a third of the clinics purchase new or additional equipment. Popular items include microscopes, hematology analyzers and delivery beds. The category ‘Accounts & other expenses’ in the graph above refers to activities such as producing annual accounts, developing guidelines, protocols and standard operating procedures. ‘Fixed assets’ concerns investments in, for example, generators, air conditioners and refrigerators.


How clinics invested their loans Renovations

Medical Stock /

Medical equipment


Accounts & other

Fixed assets



Capacity building The 516 clinics in the program completed 315 business trainings and 301 quality trainings, covering a total of 1,276 health professionals. In addition to these ongoing activities, the MCF organized a symposium for its banking partners, ‘Financing Needs of the Private Healthcare Sector’, as well as a business training for the local PSI netwerk in collaboration with one of our TA partners, PSI Kenya. At the 1st East Africa Healthcare Federation Scientific Conference in February 2013, MCF, SafeCare and our banking and TA partners facilitated a session on financing quality improvements for private healthcare providers as well as a networking round table on ‘Strengthening Private Providers’ Businesses’. The Lagos office hosted an AHME business training, teaching advisors from Marie Stopes Nigeria, Society for Family Health and the local MCF team about business plan development and the MCF program.





Clinics and results

8 Number of banks





Total number of disbursed loans

Total disbursed loan amount in USD

Loan repayment performance

Current outstanding amount in USD






Top 3 diseases treated

HIV tests performed per month

1. Malaria 2. Hypertension 3. Skin infections


Number of patient visits per month



26 112


Immunizations per month





249 18

Total number of clinics in program



Family planning visits per month

408 Doctors

643 Nurses

1,060 = 2,409

298 Midwives

Supporting staff

Total number of health care staff at clinics

20 4







Total number of health facilities in the MCF program




Number of local technical advisors


Quality assessment


Quality training


Business training



Quality improvement plan

Business plan finished



Category 3: District Hospital Top 3 priority areas


Category 5: Basic Health Center Category 6: Health Shop

1. Renovations 2. Medical equipment 3. Accounts and other expenses

1. Infection control 2. Basic infrastructure and equipment 3. Staffing and skills

Total number of SafeCare assessments


Average SafeCare Score

Category 4: Primary Health Center

Top 3 quality improvement areas

50% 40%

49% 40% 37%


28 clinics


372 clinics


Baseline Visit

Intermediate Visit

Data until 31 December 2013




TA partner

Medical Credit Fund

Dr. Olayinka Sobamowo

Olayinka Eniola

Dr. Abiodun Oyenuga

Medical Director O&S Hospital, Lagos

“The loan has helped us improve the number and quality of the surgeries we do. We have also bought an autoclave, a double bottle suction machine, theatre lights and a CardioChek for rapid lipid testing. With our next loan, we plan to build a laboratory so that we don’t have to refer so many patients to other facilities. The combination of loans with quality and business training is very effective. We have infused business culture into our medical practice and at every point, we try to balance the two objectives. The risk management and quality management trainings have been invaluable in boosting our awareness. Joining the program has raised the bar of our perception of quality and has helped us to chart a course for attaining this standard. Using SafeCare, we have identified the areas that need improvement. Although the standards look very high, they certainly show us pointers as to where we should aspire to be and we are determined to get there.”

Business Advisor Society for Family Health, Lagos

“Society for Family Health works with Medical Credit Fund under the AHME project. This gives facilities in our social franchise system the opportunity to access funding that will help them upgrade the quality of their health services. Through constant engagement and exposure to best practices from other parts of the world, we provide quality and business trainings and advise facilities to focus on priorities. One clinic that we visited in September 2013, Ibadan Nigeria, was not officially registered and thus managed the facility’s finances from the owners personal account. After five months of receiving training in the program, Ibadan Nigera has become a full-fledged legal entity with a corporate bank account. The clinic is now in the last stage of finalizing due diligence for actual loan disbursement and the director is delighted with the progress he has made.”

Quality Assurance Advisor Medical Credit Fund, Lagos

“Many health SMEs in Nigeria either lack access to funds, or have made bad investment choices in the past. Facility owners often find the demands of the bank too stringent and would rather save up from the hospital income or take soft loans from friends and family members. The unique added benefit of the Medical Credit Fund program is that it adds technical advisory services to the healthcare financing and gives facility owners a level of confidence in choosing to take up a loan. The incorporated business advisory service helps clinics make informed business decisions that guarantee the desired quality improvement as well as a return on investment. It even highlights future investment and business opportunities. We have come to realize that it is not the investment that is important, but the return on the investment, both financially and quality-wise.”




17% MCF expenditure 2013

Financial overview

13% Fund Management


The Medical Credit Fund program almost doubled in size in 2013. The number of clinics expanded from 279 to 516, the number of disbursed loans increased from 227 to 442, and the disbursed loan volume grew from USD 1.7 to USD 4.1 million.

TA General TA Tanzania TA Kenya TA Ghana TA Nigeria

16% The growth of the program over the past year has mainly been driven by Kenya, where the market activities have taken off more than in other countries. Nigeria commands the smallest part of the loan portfolio, as we only started operations there in 2012.

costs. These expenses are part of the grant income. Fund management costs, which relate to management of the loan portfolio as well as general program management, were down to USD 523,862 from USD 857,977. Technical advisory costs relates to all activities that are geared towards quality and business improvement at the clinics.





Result on loan portfolio Due to the relatively sizable share of entry loans in the portfolio (with their relatively high management fees and impairments), the income on the loan portfolio was negative over 2013. The USD 155,873 in financing costs consists of a negative USD 79,796 FX result, USD 75,558 in interest costs and USD 519 in bank costs. The total cost of the loan activities of USD 173,275 is covered by our first loss cushion.

Expenses Total costs of the Medical Credit Fund program over 2013 were just below USD 3.5 million, excluding loan and financing

AHME 2013 was the first full active year of the African Health Markets for Equity (AHME) program. AHME is a five-year partnership led by Marie Stopes International and funded by the Bill & Melinda Gates Foundation and the UK’s Department for International Development (DFID). AHME aims to improve health outcomes by enhancing the quality of private healthcare for the poor in Ghana, Nigeria and Kenya. As part of this program, the healthcare providers in the partners’ franchise networks have access to MCF loans as well as support in business and quality improvement.

Corporation (OPIC)

Ghana Nigeria

2,378,122 Hybrid fund

Interest income


Guarantee fee Income


Management fees amortized


• De Grote Onderneming

Additions to provisions


• Bill & Melinda Gates Foundation

FX result on loans


Fair value adjustment of FX-Forward


Result before financing costs


Financing costs


Result after financing costs


• Deutsche Bank Americas Foundation

• Soros Economic Development Fund

• FMO on behalf of the Dutch Ministry

• AIDS Fonds


2013 (USD)

• Calvert Foundation • Health Insurance Fund/PharmAccess



INVESTORS AND CONTRIBUTORS • Overseas Private Investment

Disbursed loans value (USD)

of Foreign Affairs • IFC (G-20 SME Finance Challenge)

With the USD 10.6 million in loans from our first round of investments in 2012, Medical Credit Fund’s capital was leveraged to a total of USD 29 million. Our hybrid investment fund has a unique ‘layered capital’ structure that blends debt financing for the loan program with grants for technical advisory services and first loss. In the event that clinics are unable to pay back their loans, the first loss grants absorb this setback, thereby lowering the risk for the debt investors. Through this layered capital structure, Medical Credit Fund has been able to leverage large amounts of private capital with public funds, thereby increasing our developmental impact significantly.



Board and management Management Monique Dolfing-Vogelenzang Managing Director Bart Schaap Director Finance Herman Abels Director Operations Tom Bouma Senior Financial Analyst Hanneke Peeters Senior Quality Manager, PharmAccess Marceline Obuya Program Manager East Africa Maxwell Antwi Program Manager Ghana Uzodinma Osisiogu Program Manager Nigeria

Supervisory board Onno Schellekens Chairman | Managing Director PharmAccess Group Klaus Vink Vice-Chairman | Solicitor, tax lawyer and senior partner at Vink & Partners Ton Coenen Executive Director Aids Fonds & SOAAIDS Nederland Frank Eijken Owner and Manager of Eijken Management & Consultancy Ben Christiaanse Former CEO National Microfinance Bank Tanzania Hans van Veggel Co-founder


PharmAccess Group Medical Credit Fund is a member of the PharmAccess Group. This group of organizations is dedicated to inclusive quality health care for people in sub-Saharan Africa. We believe that healthy populations are a major driver of social and economic development and that health is a (semi) public good. Many African governments, however, struggle to meet the healthcare needs of their citizens, while privately operated clinics often lack the means to improve their services. Without reliable institutions, health markets in these countries suffer from low trust and high transaction costs. Investors, entrepreneurs and banks are reluctant to invest in healthcare in the face of such impediments. As a result, many hospitals are overburdened, understaffed and poorly stocked. Healthcare providers are often unable to finance quality improvements. Patients receive low quality of care, have no way to measure or compare this quality, and generally have little faith in the system. As such, their willingness to pre-pay through mechanisms like health insurance remains low. Without insurance, they have no choice but to pay out-of-pocket for healthcare and often become trapped in a downward spiral of high unexpected costs paired with lost income when they fall ill. These demand- and supply-side constraints result in a healthcare value chain characterized by a vicious cycle of low and unpredictable demand, perpetuated by low quality supply of services.

Integrated approach In order to reverse this vicious cycle, the PharmAccess Group aims to build trust throughout the system. We mobilize public and private resources for the benefit of patients and doctors through quality improvements and clinical standards, loans for healthcare providers, health insurance, health infrastructure consultancy, HIV/AIDS corporate programs, mHealth and impact research. In our view, the journey towards inclusive healthcare begins with enabling quality improvement at healthcare facilities. Once hospitals and clinics can demonstrate quality of care through improvements like shorter waiting times, well-trained staff, functioning equipment and readily available medicines, patients and investors will gain trust in the healthcare system. We build institutions and create standards that help patients to make informed decisions about healthcare. Such systemic changes stimulate healthcare providers to improve their quality through targeted interventions, motivate performance-based financing mechanisms by (inter-)national donors and investors, and enable local and national healthcare authorities to monitor and regulate healthcare providers. Our approach sets in motion an upward spiral of trust, capital, financial services, quality and availability of health services, thereby scaling up functioning health systems. This has sparked considerable international interest, including the OPIC Impact Award for Access to Finance and the G20 SME Finance Challenge

award for our innovative financing model. By using public and private funds to lower risk, we have been able to leverage large amounts of international and local capital for Africa’s underfunded health systems. As the healthcare market becomes more attractive for investors, and as healthcare delivery and affordability continues to improve, patients, doctors, insurance companies, banks, government and international investors gain access to the tools they need for social and economic development.

Our partners, donors, investors and clients With a growing number of highly valued African and international partners, donors and investors from both the private and the public sector, we continue to work towards inclusive health care for all. Government partners, including the Dutch government, Kenya’s National Hospital Insurance Fund (NHIF), Tanzania’s National Social Security Fund (NSSF) and the Nigerian Ministry of Health International (donor) organizations such as the World Bank/IFC, United States Agency for International Development (USAID), International Labour Organization (ILO), Department for International Development (DfID), Clinton Foundation, Bill & Melinda Gates Foundation, Deutsche Bank Americas Foundation, Calvert Foundation, Overseas Private Investment Corporation (OPIC), Soros Economic Development Fund and CDC Foundation Research partners such as Amsterdam Institute for Global Health and Development (AIGHD) and Amsterdam Institute for International Development (AIID) Multinational corporations such as Heineken, Shell, Aegon, Achmea, SNS Reaal and Pfizer. Specialized healthcare partners such as Kisumu Medical and Education Trust (KMET), Association of Private Health Facilities in Tanzania (APHFTA), Marie Stopes International, Society for Family Health and Population Services International (PSI) Banking partners such as BancABC and National Microfinance Bank in Tanzania, KREP Bank and Chase Bank in Kenya, uniBank and HFC Bank in Ghana and First City Monument Bank and Diamond Bank in Nigeria Insurance companies such as Hygeia, AAR, Africa Medilink Ltd and MicroEnsure Health accreditation organizations such as Council for Health Services Accreditation for Southern Africa (COHSASA) and Joint Commission International (JCI)

Trinity Building C Pietersbergweg 17 1105 BM Amsterdam Phone: +31 (0)20 566 8420 Fax: +31 (0)20 566 9440

Medical Credit Fund - Progress Report 2013  
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