IFC seals deal with Co-op Bank, Philips worth Sh33B for medical equipment facility
International Finance Corporation(IFC), a sister organization of the World Bank and member of the World Bank Group, seals deal with health technology company Philips and Co-operative Bank of Kenya to help small businesses purchase essential medical equipment.
Being the first deal under the IFC-led Africa Medical Equipment Facility, worth Sh33 billion ($3000 million) in loans and leases it is a move meant to strengthen the response of these firms to Covid-19 challenges.
In a statement, the corporation said that this move was cushion smaller healthcare operators in Africa since they are perceived as risky borrowers, meaning they can’t afford medical equipment, renovations, or to recruit qualified personnel.
He added that unlocking access to finance can save lives now and will, in the long term, strengthen healthcare systems across the continent.
The Global Financing Facility’s support in the form of this first loss guarantee enables IFC to extend risk-sharing facilities to the most challenging markets including conflict-affected countries.
Co-operative Bank Group managing director and CEO, Gideon Muriuki, said that this partnership with IFC and Philips will allow Co-operative Bank to extend credit to a wider range of investors in the health sector, who previously have found credit availability a challenge.
“Health expenditure is one of the largest budget items in many households in Kenya,” he said.
Apart from the cash, the firms will benefit from an advisory services programme for small businesses in the healthcare sector which is meant to strengthen their medical equipment procurement processes, financial management competencies and business planning.
In Kenya, the Global Financing Facility support will include technical assistance to improve the quality of care for small and medium-sized healthcare facilities that are serving low-income populations, including women and children.
The advisory programme will also help participating financial institutions to strengthen credit underwriting skills for the healthcare sector.
The loans are expected to range from Sh500,000 ($5,000) to Sh220 million ($2 million) given to financial institutions for support of smaller healthcare providers in Cameroon, Côte d’Ivoire, Kenya, Rwanda, Senegal, Tanzania, and Uganda to help the firm’s lease or purchase equipment.
