Healthcare in Africa

Sub-Saharan Africa accounts for 11% of the world's population, 24% of the global disease burden and bears 44% of the world's communicable diseases.  Nearly half of the world's deaths of children under five take place in Africa. Yet, less than 1% of the global health expenditure is spent on the continent. Because public resources are severely limited, the private sector plays a significant role in providing healthcare. However, its potential is not fully utilized.

The private health sector in sub-Saharan Africa is fragmented and quality can be inconsistent. However, the sector has the important role of providing approximately 50% of all care in the region. The public health sector is often overburdened and struggling to provide a satisfactory level of care due to limited public resources. The vast majority of the region's poor people, both urban and rural, therefore rely on private healthcare. The growing population within the region will further drive the demand for affordable, quality basic healthcare services. But, at the same time, there is no investment capital available to allow private healthcare facilities to expand and improve their services.

Particularly small and medium-sized healthcare facilities (Health SMEs) find it difficult to attract investment capital, while the demand is substantial. Health SME's are often not able to meet banks' requirements for annual statements, collateral and business plans. They lack business skills, have no credit history and are unable to cover the high costs of capital charged by banks and investors to compensate for uncertainty and risk. The Medical Credit Fund was established to bridge the gap between demand for and supply of capital.

The MCF works at both sides of this gap. It works with healthcare facilities to strengthen their business case, administrative capacity and improve the quality of their medical services. This facilitates local banks to lend to Health SMEs at a lower risk profile. As a result capital provision is brought within reach of the Health SME's and lays the foundation for future servicing of these facilities by banks without external support. The MCF thus triggers and leverages investments by local capital markets and helps developing the private healthcare sector into a distinct asset class. In November 2010 MCF won the G-20 SME Finance Challenge award, which was presented to its chairman by president Barack Obama during the summit in Seoul.


The Private Healthcare Sector

Private healthcare facilities serve about 50% of all Africans seeking care. The sector is composed of for-profit commercial providers, and not-for-profit social or faith-based providers. Africans seeking care at private facilities represent all income groups and include the lowest quintiles of the population.

The potential of the private healthcare sector is now widely recognized by African governments as well as the major donor organizations and development banks. This recognition does not necessarily translate into increased resource allocation to private healthcare facilities, even though the demand for investment capital has been calculated at between USD 11 and 20 billion for the next decade.

Partly the lack of investments can be attributed to the general weak investment climate in Sub-Saharan Africa where institutions are weak and transaction costs are high. At the same time a remarkable uptake of investments in Africa can be noticed. Many countries show sustained economic growth, political stability has improved and the incidence of armed conflict has declined. Various economic sectors have indeed benefited from increased local and foreign investments. But private health is not among them, especially not the Health SME's: primary healthcare providers that serve low-income groups, while these make the majority of Africa's healthcare market.  Investors and banks to date are reluctant to provide financing as the prevailing risks are unknown and considered too high.

As a result, the sector is very under-served in terms of access to capital. And if investments in private health are made at all, they come with levy high surcharges and mark-ups to cover all unknown risk. Not many healthcare providers are able to absorb those extra costs of capital.

Health SMEs

Health SMEs constitute the vast majority of private healthcare providers in terms of doctor-patient contacts. And they represent the segment of the private healthcare market that is most underfunded. The small and medium enterprise segment covers a wide variety of organizations: smaller hospitals, diagnostic centers, health centers, dispensaries, maternity homes, health shops and nurse-driven clinics. It is there where most Africans seek care if they decide not to visit a public facility.

Health SMEs are identified as the segment that presents most of the investment opportunity of the USD 11 - 20 billion. Two-thirds of SMEs would need additional capital below USD 250,000. And it is especially these Health SMEs that are cut off from investments because the risks are considered too high by investors.

These risks relate to both financial and medical reasons:

Investors/banks have limited knowledge of the specific features of the private healthcare sector. There are few investment benchmarks to go by. Revenue streams are erratic due to the high dependency on out-of-pocket payments in health, which may affect the business case of private care providers. Also, in most cases, providers' administrative capacity is weak and do not have a credit history.

In most countries there are currently no defined medical standards and measurement of medical quality. Therefore there is no information on medical performance, providers cannot be compared and the impact of investments in healthcare provision cannot be monitored and measured.

The lack of investment capital prevents healthcare providers from investing in their facilities; they face challenges growing their businesses, upgrading their medical equipment and departments, and training and employing more skilled staff. 

The MCF Target Market 

Health SMEs are the chosen target market for the MCF. Investment needs are highest and the prospect of social and medical impact is highest in this segment. Given the challenges mentioned, this is not a segment ready for investment just like that. It is a segment where prospective borrowers need to be prepared to borrow from the local capital market and where investors need to gain experience to feel comfortable enough to see the potential of an emerging asset class.

That is the reason the MCF needs its technical assistance program. Its business advisors work with Health SMEs to reconstruct annual statements, propose efficiencies in management and operations, scan the market for growth opportunities and finally produce a convincing business plan. And its quality advisors work with the same SMEs to install or upgrade clinical procedures and protocols, improve performance areas and prepare for quality assurance through SafeCare certification and accreditation.

It is these activities that help make Health SMEs bankable. Not all, but the vast majority of participating Health SMEs indeed make the threshold. They do access a modest first loan and a larger second one. First generation lenders in the MCF Program have seen their business and quality performance increase. They attract more patients, provide better services and are in better financial shape than before.

The Medical Credit Fund mainly operates in the district hospital, primary health center, basic health center or health shop/nurse clinic segment of the private healthcare market. These are the segments where Health SMEs are active.


Vision, Mission & Objectives

The vision of the MCF is to enhance the provision of affordable quality healthcare services in Sub Saharan Africa to low-income Africans.

The mission is to enable primary health care providers in Africa to access investment capital so they can improve the quality of their services and expand their facility.

The objectives are to provide access to loans from local banks for around 2500 health care facilities, complemented with a comprehensive technical assistance program on quality improvement and business planning leading to external evaluation (SafeCare) of the facility's performance.


Governance and Management

The Medical Credit Fund was established as a not-for-profit foundation under Netherlands' law in 2009 by PharmAccess International in association with the Aids Fonds and De Grote Onderneming (DGO). Medical Credit Fund has been granted ANBI status by the Dutch Tax and Customs Administration. It is domiciled in Amsterdam, governed by a Supervisory Board.


MCF Team
Monique Dolfing-Vogelenzang, Managing Director
Bart Schaap, Director Finance
Herman Abels, Director Operations
Nicole Spieker, Program Director Quality at PharmAccess International
Tom Bouma, Senior Financial Analyst
Hanneke Peeters, Operations Manager SafeCare
Joost Zijlmans, Financial Manager
Nada Coici, Portfolio Analyst

Marceline Obuya, Program Manager East Africa
Evelyn Gitonga
Caroline Charagu
Georgine Mbeki
Ivy Syovata

Marceline Obuya, Program Manager East Africa
Anunsiatha Mrema
Rose Sweya

Uzodinma Osisiogu, Program Manager Nigeria
Olusegun Sanya
Abiodun Oyenuga

Maxwell Akwasi Antwi, Program Manager Ghana
Bismark Hedagbui
Hansen Yaw Asare
Gabriel Fiadorme
Charles Attram
Phylicia Adjei
Joseph Asumang Peasah
Bonifacia Agyei

Supervisory Board
Onno Schellekens, Chairman
Ruud Hopstaken
Ton Coenen
Frank Eijken
Ben Christiaanse, Audit Committee

Tobias Rinke de Wit


MCF Team

Monique Dolfing-Vogelenzang prepared the launching of the Medical Credit Fund at PharmAccess International and is the Managing Director of the Fund. Previously she has held senior commercial and business management positions in the private sector.

Herman Abels is in charge of the Fund's operations.  He is well seasoned in development finance and microfinance and previously worked in the international development and private consulting sectors.

Bart Schaap came to the MCF as Director of Finance. He is a monetary economist and worked in the financial sector as risk manager and credit finance specialist in both developed and emerging markets.

Nicole Spieker is the Program Director Quality at PharmAccess International and is seconded to the MCF to oversee all clinical quality operations. At PharmAccess she is in charge of SafeCare. She gained hands-on experience in African hospital management as operational director of a large private hospital in Tanzania.

Tom Bouma is an experienced SME consultant. He is the Fund's Senior Financial Analyst, responsible for all loan appraisals processes, and provides training to MCF's Technical Assistance partners in the field of business planning.

Hanneke Peeters is seconded by PharmAccess to oversee Quality Improvement Plans of Health SMEs and links quality to business planning.  She was responsible for the set-up and operations of the PharmAccess office in Nigeria.

Joost Zijlmans has a controlling background and worked for PharmAccess for four years before joining the Medical Credit Fund. In his current position, he is responsible for the Budget & Control Cycle of the Medical Credit Fund's loan portfolio and technical assistance programs.

Marceline Obuya is the Fund's Program Manager in East Africa, stationed in Nairobi, Kenya.  Holding an MBA and well experienced in banking, she assists the Fund's banking partners in Africa in product and systems development.

Nada Coici started as an intern and then stayed on to work as a portfolio analyst. Before joining the Medical Credit fund, she graduated from Utrecht University with a background in International Financial Economics. Currently, she is in charge of loan portfolio analysis and process flow monitoring.

Maxwell Antwi is the MCF Program Manager in Ghana. He is a medical doctor with a rich background in Health Service Management, Public Health and
Obstetrics-Gynaecology practice in both private and public health

Uzodinma Osisiogu is the Program Manager for Nigeria. He had his training background in Engineering, but has had a decade experience in Banking & Project Management. As a certified PMP & vast in banking lending product
development and management, he assists the Fund's banking partners in Nigeria, as well as monitor & coordinate the program activities of Technical
Assistance Partners.

Supervisory Board

Onno Schellekens is the Managing Director of the PharmAccess Group. He co-founded the Health Insurance Fund, the Medical Credit Fund and the Investment Fund for Health in Africa (IFHA).

Ruud Hopstaken has held executive positions at organizations like Buma/Stemra, PriceWaterhouseCoopers and the Amsterdam Medical Centre. He is currently involved in several boards and committees, including at the National IT Institute for Healthcare in the Netherlands (NICTIZ), GGNet and AMC Ventures.

Ton Coenen is the CEO of the Aids Fund and STI Aids Netherlands, a member of the Steering Committee of Action Europe, the Pan-European NGO partnership on HIV/Aids, and a board member of the European partner of the International Council of Aids Service Organizations (ICASO). 

Frank Eijken has held several executive positions in the field of commercial television, including with SBS and RTL. He now owns and manages his own consultancy organization.

Ben Christiaanse has over 30 years of banking experience. In 2006 he was appointed as CEO of National Microfinance Bank in Tanzania. He developed NMB into one of the largest financial institutes of Tanzania, and successfully managed an IPO of part of the share capital of the bank in 2006. He now provides consultancy, specially focused on financial institutes in developing countries.


Tobias Rinke de Wit is Director Business Development and Research with Amsterdam Institute for Global Health and Development / PharmAccess Group. He holds a chair in Sustainable Healthcare, in particular Affordable Diagnostics at the Department of Global Health, AIGHD at the Academic Medical Center of the University of Amsterdam.