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MCF raises €32.5m to support health entrepreneurs in sub-Saharan Africa

MCF raises €32.5m to support health entrepreneurs in sub-Saharan Africa

Medical Credit Fund (MCF), a Netherland-based credit organisation fully dedicated to the African health sector, has announced the completion of a €32.5million fundraise of its second fund (MCF II), a financing round to support healthcare providers in sub-Saharan Africa.

The funding round was anchored by the Dutch Ministry of Foreign Affairs, which provided the first equity injection of €7.5million to cater to the demand for loans during the height of the COVID-19 crisis.

Also participating in this funding round is Commonwealth Development Corporation (CDC) Group which donated €10million, Field Marketing Organisations (FMO) which donated €7.5million, Swedfund with €5million and Phillips with €2.5million.

MCF II will enhance access to capital for gender-smart healthcare businesses and help to increase health services for female patients. It will cater to malaria prevention and treatment as well as maternity childcare.

“The funds will help to bridge the financing gap for small and medium-sized health businesses, allowing entrepreneurs to finance construction work, purchase equipment, and prevent medicine stock-outs,” the managing director of MCF, Arjan Poels, said.

While thanking their investors, and the Dutch Ministry of Foreign Affairs for the support they received, he noted that mitigating the chronic underfunding of the sector means more patients can receive better healthcare.

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Over the years, the MCF has provided over 930 loans worth over $11 million to health SMEs across Nigeria with a portfolio repayment rate currently greater than 90 percent.

With this new fund and digital direction, health SMEs will not only have access to less cumbersome financing, but loans backed with technical support in areas of investment advisory and quality improvement geared towards improving their healthcare businesses.

Since its foundation, the fund has provided over 6,500 loans to healthcare providers in Africa, worth over €120 million, with a 96 percent repayment rate.

BusinessDay learnt that it has reached 1,800 small and medium-sized enterprises (SMEs) in Kenya, Ghana, Nigeria, Tanzania and Uganda.

Loans are combined with support for business and quality improvement using the PharmAccess– SafeCare standards and methodology, through which 80 percent of the clients can improve their services.

MCF will deploy the funding to further scale its impact across sub-Saharan Africa with a focus on advancing its digital loan products.

The managing director and head of Private Equity Funds, CDC Group, Clarisa De Franco, said affordable, reliable and quality health care has never been more crucial than it is today, and this is why CDC is thrilled to be deepening its partnership with MCF, [in] supporting the primary healthcare sector in Africa.

She said their commitment to MCF II will enable the fund to increase its flexible finance offers to an estimate of over 2,500 healthcare SMEs, bolstering their ability to meet the increased demand for quality healthcare and to serve approximately 10 million patients by 2030.

Marnix Monsfort, the director of Financial Institutions at FMO, said they were pleased to have contributed to this “one-of-a-kind” fund targeting healthcare SMEs through their Building Prospects and MASSIF funds in the form of a subordinated debt facility.

“As the Fund is aimed at reducing inequalities in several of our core markets, with a strong gender focus, we believe the fund is uniquely positioned to play a leading role in the healthcare space and are proud to have been one of the investors for the launch of the second fund,” Monsfort said.

While Audrey Obara, head of Healthcare at Swedfund, argued that small and medium-sized private health facilities are crucial to increasing access to healthcare in Sub-Saharan Africa, especially for women and children; Jan-Willem Scheijgrond, head of Government and Public Affairs at Philips said their organisation has experienced first-hand that access to finance is the main bottleneck for healthcare providers in Africa to expand their services and invest in areas such as advanced medical imaging technologies.

“The Medical Credit Fund has proven that it can solve this financial bottleneck, and that is why we are cementing our long-term partnership with our investment in the fund,” he said.

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