Medical Credit Fund (MCF), one of the four nonprofit members of the Netherlands-based PharmAccess Group, recently raised a mix of equity and debt totaling EUR 32.5 million (USD 36.7 million) to “expand the Fund’s presence and support to healthcare providers in sub-Saharan Africa.” In particular, the new funding is slated for investment in small and medium-sized enterprises (SMEs) providing “primary healthcare services including malaria prevention…and maternal and child care” as well as developing the fund’s Cash Advance service, which allows healthcare facilities in Kenya to borrow online at an interest rate of 24 percent per year.
The funding includes a first-loss, equity injection of EUR 7.5 million (USD 8.5 million) from the Dutch Ministry of Foreign Affairs and a loan of EUR 2.5 million (USD 2.8 million) from Philips, a medical technology company headquartered in the Netherlands. The other investments are loans from the following development finance institutions: EUR 10 million (USD 11.3 million) from the UK’s CDC Group, EUR 7.5 million (USD 8.5 million) from Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and EUR 5 million (USD 5.7 million) from Swedfund. The US International Development Finance Corporation (DFC) will also participate with a guarantee of unspecified volume.
MCF, founded in 2009, works to “increase access to better healthcare services in sub-Saharan Africa for low-income patients” by financing for medical businesses that would otherwise find it difficult to acquire funding. As of 2020, MCF had a loan portfolio of USD 35.7 million. The NGOs of Amsterdam-based PharmAccess Group work in Ghana, Kenya, Nigeria, Tanzania and Uganda to expand access to healthcare by funding insurance and healthcare providers, promoting a high level of quality standards, and producing independent research.
The Ministry of Foreign Affairs of the Netherlands is a government body based in the Hague that is responsible for carrying out Dutch foreign policy. It focuses on “international stability and security, energy and raw material security, the international legal order (including human rights) and the commercial and economic interests of the Netherlands and Dutch businesses.” For 2018, the most recent year for which data are available, the Ministry had a budget of EUR 9.3 billion (USD 11 billion).
Founded in 1831, Philips is a Netherlands-based health technology conglomerate that offers products in areas ranging from oral hygiene to lightbulbs. As of 2020, the firm employs approximately 80,000 people and has total assets of EUR 27.7 billion (USD 31.4 billion).
Established in 1948 as the Colonial Development Corporation, the mission of CDC is to foster growth in “sustainable” businesses to raise living standards in developing countries. To do this, it deploys debt, equity and “fund-of-funds” strategies in Africa and South Asia. During 2020, CDC issued new commitments valued at GBP 1.8 billion (USD 2.5 billion) bringing the institution’s investment portfolio to USD 6.2 billion.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private investors. The institution works toward the UN’s Sustainable Development Goals by funding capacity development and by placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. For the first half of 2021, FMO reported a net profit of EUR 198 million (USD 224 million) on a portfolio valued at EUR 12 billion (USD 14 billion).
Founded in 1979, Swedfund’s goal “is to fight poverty by investing in sustainable businesses” in Africa, Asia, Eastern Europe and Latin America. As of 2020, it reported SEK 7.2 billion (USD 798 million) in total assets.
DFC was launched in 2020 to “help businesses expand into emerging markets, foster growth and improve lives in the developing world while reinforcing US foreign policy and national security interests.” The organization issues equity placements, insurance, technical assistance and research in areas such as “energy, healthcare, critical infrastructure and technology.” Upon its founding, DFC took over the work of the Overseas Private Investment Corporation (OPIC) as well as the Development Credit Authority of the US Agency for International Development. During 2020, DFC brought in net income of USD 232 million, closing the year with assets of USD 12 billion.
By Adhya Singh, Research Associate
Sources and Additional Resources
Direct contact with PharmAccess Group
MCF homepage
https://www.medicalcreditfund.org/
MCF 2020 annual report
https://www.medicalcreditfund.org/wp-content/uploads/sites/4/2021/05/MCF-Annual-Report-2020-Website.pdf
Dutch Ministry of Foreign Affairs webpage
https://www.government.nl/ministries/ministry-of-foreign-affairs
Philips homepage
https://www.philips.com/
Phillips 2020 annual report
https://www.philips.com/c-dam/corporate/about-philips/investors/shareholder-info/agm-2021/Philips%20Annual%20Report%202020.pdf
CDC Group homepage
https://www.cdcgroup.com/
Swedfund homepage
https://www.swedfund.se/
Swedfund 2020 integrated report
https://www.swedfund.se/media/2490/swedfund-integrated-report-2020.pdf
DFC homepage
https://wwwdfc.gov/
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