ImpactAlpha, January 13 – Small, privately-run clinics are often the only providers of essential health services in remote and low-income parts of Africa. Medical Credit Fund has provided working capital and financing for equipment and facilities to these providers for 12 years.
A consortium of U.S. government funders and private foundations have committed guarantees of $19.2 million to facilitate new loans to private clinics to upgrade facilities, procure personal protective equipment, and shore up revenues lost due to national stay-at-home orders.
The guarantees enable Medical Credit Fund to disburse capital remaining in its first fund and kick-start lending from its second fund.
The U.S. International Development Finance Corp. kicked in $17.7 million in loan guarantees, while the Rockefeller, Skoll and MCJ Amelior foundations contributed $1.5 million. The U.S. President’s Malaria Initiative, started under the George W. Bush administration, committed $700,000 subsidy to cover DFC’s risks and costs.
This is the first deal from the Health Finance Coalition, which aims to use blended-finance to catalyze private capital to advance U.N. Sustainable Development Goal No. 3 (Ensure healthy lives and promote well-being for all).
The facility will target clinics in Ghana, Kenya, Nigeria, Tanzania and Uganda (see, “Agents of Impact converge on financing solutions to ‘light every clinic’”). Financially-crippled healthcare centers would jeopardize access to malaria treatments in the five target countries. COVID’s economic impacts “could be devastating for malaria, if the private sector health providers start to shut down,” said Martin Edlund of nonprofit Malaria No More, which is managing the loan guarantees.