Medical Credit Fund (MCF), one of the four non-profit members of the Netherlands-based PharmAccess group, recently raised a mix of equity and debt totaling 32.5 million euros (36.7 million of US dollars) to “expand the Fund’s presence and support to health care providers in sub-Saharan Africa.” In particular, the new funding is planned for investment in small and medium-sized enterprises (SMEs) providing “primary health care services, including malaria prevention … and maternal and child care”, as well as the development of the Fund’s Cash Advance service, which enables health facilities at Kenya to borrow online at an interest rate of 24% per annum.

The funding includes a first loss of equity of 7.5 million euros ($ 8.5 million) from the Dutch Ministry of Foreign Affairs and a loan of 2.5 million euros ($ 2.8 million) from Philips, a Dutch-based medical technology company. The other investments are loans from the following development finance institutions: 10 million euros ($ 11.3 million) from the UK group CDC, 7.5 million euros ($ 8.5 million) from Nederlandse Financierings- Maatschappij voor Ontwikkelingslanden (FMO) and EUR 5 million (USD 5.7 million) from Swedfund. The American International Development Finance Corporation (DFC) will also participate with an unspecified volume guarantee.

MCF, founded in 2009, works to “improve access to better health services in sub-Saharan Africa for low-income patients” by funding medical businesses that would otherwise have difficulty obtaining funding. In 2020, MCF had a loan portfolio of $ 35.7 million. Amsterdam-based PharmAccess group NGOs are working in Ghana, Kenya, Nigeria, Tanzania and Uganda to expand access to health care by funding insurance and health care providers, promoting a high level of quality standards and producing independent research.

The Netherlands Ministry of Foreign Affairs is a government agency based in The Hague which is responsible for the implementation of Dutch foreign policy. It focuses on “international stability and security, energy and commodity security, the international legal order (including human rights) and the commercial and economic interests of the Netherlands and the Dutch companies’. For 2018, the most recent year for which data is available, the ministry had a budget of 9.3 billion euros (US $ 11 billion).

Founded in 1831, Philips is a Netherlands-based healthcare technology conglomerate that offers products in areas ranging from oral hygiene to ampoules. In 2020, the company employs approximately 80,000 people and its total assets stand at 27.7 billion euros ($ 31.4 billion).

Founded in 1948 as the Colonial Development Corporation, CDC’s mission is to foster the growth of “sustainable” businesses to raise living standards in developing countries. It does this by deploying debt, equity and “fund of funds” strategies in Africa and South Asia. In 2020, CDC issued new commitments valued at £ 1.8 billion (US $ 2.5 billion) bringing the institution’s investment portfolio to US $ 6.2 billion.

Founded in 1970, FMO is 51% owned by the Dutch government and 49% by private investors. The institution works towards the achievement of the United Nations Sustainable Development Goals by funding capacity development and placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. For the first half of 2021, FMO achieved a net profit of 198 million euros (224 million dollars) on a portfolio valued at 12 billion euros (14 billion dollars).

Founded in 1979, Swedfund’s goal “is to fight poverty by investing in sustainable businesses” in Africa, Asia, Eastern Europe and Latin America. In 2020, it reported total assets of SEK 7.2 billion (USD 798 million), including a total loan portfolio of SEK 4.9 billion (USD 535 million).

DFC was launched in 2020 to “help businesses grow in emerging markets, foster growth, and improve lives in developing countries while strengthening U.S. foreign policy and national security interests.” The organization has an investment cap of $ 60 billion to deploy in forms such as equity investments, insurance, technical assistance and research. DFCs focus their efforts on low- and lower-middle-income countries in areas such as “energy, health care, critical infrastructure and technology”. In 2020, DFC’s net cost of operations was $ 232 million.

By Adhya Singh, Research Associate

Additional sources and resources

FMO press release
https://www.fmo.nl/news-detail/76cceedb-5335-4a83-8be2-7a1a2364cccd/medical-credit-fund-raises-eur-32-5-million-to-support-health-entrepreneurs-in- Sub-Saharan Africa

MCF Home Page
https://www.medicalcreditfund.org/

MCF Annual Report 2020
https://www.medicalcreditfund.org/wp-content/uploads/sites/4/2021/05/MCF-Annual-Report-2020-Website.pdf

PharmAccess Group Home Page
https://www.pharmaccess.org/

Dutch Ministry of Foreign Affairs webpage
https://www.government.nl/ministries/ministry-of-foreign-affairs

Philips homepage
https://www.philips.com/

Phillips Annual Report 2020
https://www.philips.com/c-dam/corporate/about-philips/investors/shareholder-info/agm-2021/Philips%20Annual%20Report%202020.pdf

CDC Group home page
https://www.cdcgroup.com/

Swedfund homepage
https://www.swedfund.se/

Swedfund integrated report 2020
https://www.swedfund.se/media/2490/swedfund-integrated-report-2020.pdf

DFC Home Page
https://wwwdfc.gov/

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