T HE M EDICAL C REDIT F UND A PPROACH F INANCING Q UALITY I MPROVEMENT IN A FRICAN H EALTH C ARE

C ONTENTS 1 2. MCF Funding structure 3.MCF Operating structure 1. Introduction; Mission and financing situation within the sector Impact and results +

MCF IS PART OF THE P HARM A CCESS G ROUP Health insurance programs in Nigeria, Tanzania, Kenya, Mozambique, and Namibia for low-income groups (<USD 1.50/day) Health Plans LoansInvestments Affordable loans to private medical providers via local banks, combined with technical assistance and business training Private Equity fund focused on healthcare in Africa: insurance, pharma distribution, and healthcare facilities Impact evaluation, research, training, and policy for improving programs and measuring outcomes. Collaboration with AMC, UvA, VU Research Quality New Initiatives Collaboration with COHSASA, and JCI. Stepwise improvements through recognized standards for health facilities in resource- restricted settings Mobile Health Global Health Membership

MCF M ISSION AND T ARGET M ARKET  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 health care providers in Africa to access investment capital so they can improve the quality of their services and expand their facility  The target market thus consists of private healthcare facilities in Sub Saharan Africa 3

4  Weak financial administration  Limited collateral and credit history  Difficult enforcement of loan contracts  No defined medical standards  No measurement of medical quality  no information on medical performance  Private credits only at very high market rates T HE C HALLENGE : H EALTHCARE P ROVIDERS ARE U NDERFUNDED No investments to grow and improve business, purchase equipment, train staff In many Sub-Saharan countries, local government is unable to provide all necessary health care services. As a result, over 50% of healthcare services is provided through the private healthcare sector. Those private facilities are underfunded:

T HE C HALLENGE : CLINICS HAVE NO ACCESS TO BANKS, NO QUALITY STANDARDS 5 Patients Limited access to services Quality issues Rural / semi-urban clinics Pocket banking No training on quality No financial information Shortage of medical staff Irregular income stream Little trust in banks Loans are too expensive Banks – branch offices Bank account? Collateral? Quality level? Credit history? Financial administration? No cash flow lending Bank – head office SME lending is a priority, but: No understanding of healthcare sector Health sector is perceived as risky  No investments in expansion, quality, staff, etc. $ $ No Special SME healthcare products

Medical: Quality upgrading at clinic level Medical upgrading & business plan to improve quality and efficiency and assessment of results (SafeCare) Financial: Access to risk capital at bank level Stepwise approach at affordable terms & conditions to enable expansion of services The two objectives are interlinked and offered through local partners: Capacity building through health network organizations and local banks T HE I NVESTMENT STRATEGY : T WO RISK REDUCTION PROGRAMS

7 7 M EDICAL C REDIT F UND A CCESS TO F INANCE P ROGRAM Business planning improvement, making healthcare providers bankable  Basic introduction training to business planning  Preparation of financial statements (local partner)  Support in writing simple business plan (template)  Support with filing of loan application

MCF F UNDING S TRUCTURE : DOUBLE LEVERAGE  MCF focuses on health SMEs through a structured leverage model  The main thrust is to create access to affordable loans for quality improvement  Winner of G20 SME Finance Challenge Award (2010) and OPIC Impact Award (2014)  Which triggered the involvement of both public and private investors by late 2012  First funding closed at USD 29 million with Soros, Gates Foundation, Deutsche Bank, OPIC, Calvert Foundation  First loss covered by Dutch Ministry, private donations and USAID  Active in Kenya, Tanzania, Nigeria, Ghana  Loan sizes range from kes 100k to Kes500million 8

MCF O PERATING S TRUCTURE : WORKING WITH LOCAL PARTNERS 9 Support to clinics  Through local partners  Business planning and financial statements  Quality measurement and improvement (SafeCare) with 5 certificate levels Loans  Through local banks in local currency  MCF guarantees part of the risk  Banks increasingly assumes part of the risk  Reasonable conditions

MCF I NVESTMENT C RITERIA : SELECTION CRITERIA 10 Clinical and social Clinical services We work with facilities offering primary care services or specialized services Patient safety Facilities need to have a basic patient safety policy in place Quality uptake Facilities are eager to improve the clinical quality of their operations Social relevance Facilities include service delivery to low-income customers Business and banking Private sector The MCF works with licensed private sector health facilities Minimal outreach Facilities record at least 5000 patient visits per year Scaling up Facilities are eager to grow and borrow for that purpose Documentation Facilities have their basic medical and business documentation in order

H OW DOES IT WORK IN PRACTICE 1.SafeCare entry assessment 2.Quality improvement plan 3.Business plan 4.Loan appraisal, disbursement and monitoring 5.Business and quality training 6.Analyses of healthcare and business parameters - biannually 7.Repeat SafeCare assessments - annually 11 Start program Data collection using tablets

MCF I MPACT : HIGHER TRUST – LOWER RISK 12

V ISUAL I MPRESSION : BEFORE AND AFTER 13

MCF PARTNER NETWORK 14 Kenya Tanzania Ghana Nigeria

T HANK Y OU 15